Seoul shares ended lower on Thursday led by key exporters and banks after gloomy US data, but issues added to the MSCI Korea Standard Index, including SK Broadband, outperformed. The Korea Composite Stock Price Index (KOSPI) ended down 2.37 percent to 1,380.95 points, its lowest close since April 30.
"After months of nearly uninterrupted gains, stock markets are fast losing steam as investors are turning more cautious and are moving to lock in profits made since early March," said Choi Seong-lak, a market analyst at SK Securities. The main index has risen over 39 percent from its a low of 992.69 points in early March.
"Options expiry falling today, which caused more volatility, and foreign selling added further pressure," Choi added. Shares in metal products maker Hyundai Hysco ended 4.66 percent higher on hopes of an earnings turnaround and after POSCO, one of its major suppliers, said on Thursday it would cut prices of its domestic steel products by up to 20 percent in its biggest-ever price reduction.
"Hyundai Hysco, as a cold-rolled steel-focused company, buys a lot of hot-rolled steel...so POSCO's price cut comes as welcome news," said Kim Mi-hyun, an analyst at LIG Investment & Securities. POSCO, the world's No 4 steelmaker, ended 5.06 percent lower. News that NCSoft, Celltrion, and SK Broadband were added to the MSCI Korea Standard Index helped the shares outperform. The changes to the index will take effect as of the close of May, 29, 2009.
The MSCI Korea Standard Index, provided by MSCI Inc, is tracked closely by global investors. NCSoft, an online game publisher, edged down 1.12 percent, and biotechnology company Celltrion ended up 8.14 percent. SK Broadband, a fixed-line firm controlled by the country's top mobile carrier SK Telecom, jumped 7.83 percent. But LG Hausys, which was removed from the index, sank 5.39 percent.
Banks fuelled the market's downward run, with KB Financial Group losing 4.82 percent. Key exporting issues also fell on the back of renewed worries about the United States, South Korea's second-largest export market. Analysts said weakness in US retail sales data released on Wednesday pointed to a continued slump in the world's largest economy.
Hyundai Motor, South Korea's top automaker, declined 1.69 percent and LG Display, the world's second-biggest LCD maker, retreated 4.05 percent. Elsewhere, Hyundai Mobis gained 2.91 percent after a local media report that the auto parts maker was talking with BMW to supply parts for its China production unit.
"Amid the severe difficulties faced by its US peers, Hyundai Mobis' competitiveness is being highlighted lately," LIG Investment said in a report on Thursday. Institutions sold a net 561.8 billion won worth of shares and retail investors bought a net 668.2 billion won. Foreign investors sold a net 65.2 billion won. Decliners led advancers 552 to 272, with 56 unchanged.
Trading volume stood at 694 million shares worth 7.5 trillion won compared with 706 million shares worth 7.0 trillion won on Wednesday. The KOSPI 200 June futures index ended 4.70 points lower at 177.15, and the KOSPI 200 spot index fell 4.85 points to 176.29. The junior Kosdaq market rose 0.15 percent to end at 536.78 points.
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