South Korean shares ended flat on Wednesday as weakness in key technology and banking issues such as Samsung Electronics and KB Financial weighed. Analysts said the market was taking a breather following its recent rises, with fund redemption prompting selling by institutions and foreign buying momentum weakening.
The Korea Composite Stock Price Index (KOSPI) finished 0.03 percent higher at 1,726.60 points. "Caution is pervading ahead of options expiry and Bank of Korea's interest rate meeting later this week. And adding to that were fund redemptions as key blue chips have recovered well above pre-financial crisis level," said Kim June-kie, a market analyst at SK Securities.
The Bank of Korea is widely expected to hold the key interest rate unchanged at 2 percent on Friday. Foreign investors were buyers of a net 297.7 billion won ($264.9 million) worth of stocks, buying shares for the 19th consecutive session, their longest buying streak since August 2009.
Institutions were sellers of a net 103.3 billion won. Memory chip makers retreated, tracking a dip in the key US semiconductor index. Shares in Samsung Electronics, the world's No 1 memory chip maker, shed 1.15 percent and Hynix Semiconductor lost 3.53 percent.
Samsung had gained nearly 20 percent in recent weeks on expectations of stronger sales. On Tuesday, it forecast a record quarterly profit. Losses in banks also pressured the index, as KB Financial Group, the parent firm of South Korea's top commercial lender, fell 2.93 percent, and Woori Finance Holdings lost 2.13 percent.
"There was talk in the market that KB Financial Group will not pursue Korea Exchange Bank (KEB), and this prompted falls in both KB Financial and KEB," said Hwang Huhn, an analyst at Woori Investment & Securities. Shares in KT&G, South Korea's tobacco monopoly, rose 3.14 percent and KT Corp, the country's dominant fixed-line and No 2 mobile phone operator, advanced 1.75 percent.
Advancers outnumbered decliners 495 to 297, with 87 issues ending flat. Trading volume stood at 382.5 million shares worth 5.3 trillion won, compared with 413.5 million shares worth 4.74 trillion won in the previous session. The KOSPI 200 June futures index ended down 0.50 points at 228.00, and the KOSPI 200 spot index fell 0.20 points at 227.31. The junior Kosdaq market ended 0.89 percent higher to close at 510.90.
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