South Korean shares fell on Friday as investors took profits after the main index hit record highs earlier this week, and as concerns about further Chinese monetary policy tightening weighed on shares of big exporters. The Korea Composite Stock Price Index (KOSPI) finished down 1.74 percent at 2,069.92 points, retreating from an all-time high of 2,119.24 points hit on Wednesday.
"Worries about Chinese inflation are overriding the market. There is even talk China may raise the interest rate before the Lunar New Year holiday," said Hong Soon-pyo, a market analyst at Daishin Securities. Hong said Beijing is expected to continue to signal its determination to rein in inflation and point to more hikes in the future.
Hyundai Motor shares have risen 12 percent so far this year, and Kia Motors 14.4 percent, compared with the broader market's 2.7 percent gain. Shares in KB Financial Group fell 3.4 percent and Shinhan Financial Group slipped 3.6 percent. Shares in POSCO, the world's No 3 steelmaker, lost 1.3 percent and Doosan Infracore, which exports construction equipment's to China, fell 3.1 percent.
Shares in LG Display retreated 1.7 percent ahead of its fourth-quarter results announcement. Other technology issues also eased, with Samsung Electronics, the world's No 1 memory chip maker, down 1.1 percent. The KOSPI 200 March futures index fell 5.65 points to 272.55 points. The KOSPI 200 spot index lost 5.08 points to 272.67. The junior Kosdaq index rose 1.43 percent to 525.75.
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