Seoul shares sagged to their lowest close in three weeks on Wednesday, hit by heavy foreign selling of technology firms such as Samsung Electronics amid worries over profits and rising global interest rates.
The rate worries offset a fall in the South Korean won to its lowest in more than a month against the dollar - which normally lifts export-geared tech stocks - while hitting firms heavily reliant on raw materials such as power provider KEPCO on concerns about higher import costs.
Shares in KT&G Corp rose 3.69 percent to 56,200 won after Franklin Mutual Advisers, the largest shareholder of the tobacco company, said it would support board candidates proposed by US investors Carl Icahn and Steel Partners.
The Icahn group has made a hostile bid for KT&G and nominated three candidates to the cigarette maker's board.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 0.20 percent to end at 1,314.05, bouncing back from a session low of 1,296.78. That was still the lowest close since ending at 1,303.84 on February 15.
Worries about profits in the technology sector were exacerbated by concerns about further interest rate increases in the United States, the world's biggest economy, at time when the European Central Bank was also raising rates.
Foreign investors sold a net 492 billion won ($503.9 million) in shares, data at 0645 GMT showed, bringing their total over the past four sessions to some 990 billion won worth.
Samsung Electronics Co Ltd, the world's biggest maker of memory chips fell 0.95 percent to 623,000 won, tracking lower US peers and hit by continued worries about the impact from falling prices of NAND flash memory chips in first quarter earnings.
LG.Philips LCD Co Ltd fell 2.33 percent to 43,950 won. Profit margins at the flat panel maker in the current quarter are expected to be hit by costs related to the switch to a newer generation production line and a steeper-than-expected fall in monitor panel prices.
But technology shares pared losses late in the session, with Hynix Semiconductor Inc ending up 1.03 percent after having fallen as much as 2.74 percent earlier.
Stocks sensitive to a stronger won also fell, with POSCO Co Ltd, the world's fifth-biggest maker of steel, ending down 2.74 percent to 231,000 won, while state-run Korea Electric Power Corp (KEPCO) fell 1.18 percent to 41,900 won.
Trade volume reached 313.7 million shares worth 4 trillion won, data at 0645 GMT showed, compared to 297.3 million shares worth 3.9 trillion won on Tuesday. Decliners edged out gainers by 375 to 346 with 96 titles ending flat.
Institutional investors bought a net 365.1 billion won worth in shares on the main bourse, while retail investors bought a net 108.8 billion won.
The March KOSPI 200 futures index gained 0.40 point to 170.10, while the underlying KOSPI 200 spot index fell 0.37 point to 169.76.
South Korea's junior and tech heavy Kosdaq market fell 0.21 percent to finish at 657.08.
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