Seoul shares posted their biggest fall in eight weeks on Friday, led by firms reliant on China such as steel maker POSCO, after Beijing raised interest rates, creating worries about slowing demand in South Korea's top export market.
Concerns that the won would continue to strengthen also kept exporters on edge, as the local currency may be hit on two sides: speculation that China will let the yuan appreciate after raising interest rates, and a weaker dollar, which fell after the Federal Reserve chairman indicated the United States will soon suspend its monetary policy tightening campaign.
Hyundai Motor Co, the country's biggest auto maker, fell 1.78 percent to 82,900 won. Affiliate Kia Motors Co fell 1.02 percent to 19,400 won.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 2.26 percent to end at 1,419.73, its biggest one-day percentage fall since dropping 2.83 percent on March 3.
Shares fell 2.2 percent for the week, marking its first weekly fall in five. However, the KOSPI still rose 4.4 percent in April.
Foreign investors were net sellers for a fourth consecutive session, selling a net 189.3 billion won in shares on the main bourse as of 0700 GMT, and bringing their total during that period to 1.6 trillion won.
POSCO Co Ltd, the world's fifth-biggest steel maker by output, dropped 4.36 percent to 263,000 won, its biggest one-day fall since falling 4.86 percent on October 5. Around a third of its exports in 2005 went to China, POSCO has said.
Samsung Electronics Co Ltd fell 3.01 percent to 644,000 won.
Trade volume reached some 323 million shares worth 4.5 trillion won compared to 363.5 million shares worth 4.7 trillion won on Thursday. Decliners trumped gainers by 572 to 179 with 57 titles ending flat. Retail investors bought a net 315.3 billion won, but institutional investors sold a net 196.2 billion won.
The June KOSPI 200 futures index fell 4.55 points to 184.45, while the underlying KOSPI 200 spot index lost 4.30 points to 184.10.
South Korea's junior and tech-heavy Kosdaq market fell 1.14 percent to finish at 685.44.
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