Seoul shares ended lower on Tuesday after a bearish economic outlook by the new South Korean finance minister, with caution ahead of a US government announcement on a bank rescue plan further pressuring sentiment. The Korea Composite Stock Price Index finished down 0.32 percent at 1,198.87 points, after hitting a high of 1,219.76 points.
"Worries about US bank rescue plans and the fact that key blue chip issues have risen substantially prompted foreign investors to turn net sellers today," said Won Sang-pil, a market analyst at Tong Yang Securities.
Foreign investors were sellers of a net 212.7 billion won ($153.4 million) worth of shares, snapping a nine-session buying streak, their longest since July 2005, in which they picked up a net 1.66 trillion won. "Foreign investment flows into the market may halt for now as shares are not so cheap at the index's current level of around 1,200," said Park Chan-ik, a managing director at Morgan Stanley's Seoul branch, at a press conference on Tuesday.
But Park said foreign investors would almost certainly be net buyers for the whole year given the likelihood of a stronger won and the tendency of South Korean firms to suffer more during economic downcycles but recover quickly when upturns come about.
"Unless the won currency weakens drastically, to around 1,700 won to 2,000 won, we are not likely to see big foreign selling this year," Park added. Major exporters including Samsung Electronics and LG Electronics retreated as investors kept an anxious eye on the United States, South Korea's second-biggest export market.
Samsung Elec, the world's No 1 memory chip maker, ended down 1.33 percent and LG Electronics, the world's No 4 maker of cellphones, fell 2.5 percent. Ssangyong Motor, which resumed trading on Monday after a month-long suspension, rose by its daily limit of 14.6 percent, after losing 15 percent in the previous session.
The maker of sport utility vehicles won court receivership on Friday. Shinhan Financial Group, the holding firm of Shinhan Bank, went up 1.19 percent and Woori Finance Holdings, the holding company of Woori Bank, gained 1.01 percent. Samsung Securities ended 0.16 percent higher after posting slightly better than expected quarterly results, despite a registering a 56 percent year-on-year drop in quarterly net profit.
Hynix Semiconductor climbed 1.9 percent, rising for a second straight session, on continued hopes for a memory chip industry turnaround. Institutions bought a net 152 billion won and retail investors picked up a net 56.4 billion won. Advancers led decliners by 423 to 391, with 79 shares ending unchanged.
Trading volume stood at 461.8 million shares worth 4.07 trillion won, compared with 469 million shares worth 4.84 trillion won on Monday. The KOSPI 200 March futures index fell 1.65 points to 156.85 points and the KOSPI 200 spot index went down 0.86 points to 156.84 points. The junior Kosdaq advanced 0.91 percent to close at 380.26 points.
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