Seoul shares reversed the previous session's gain on Monday, hurt by the struggle in Washington over the raising of the US debt ceiling, with time running out to avert a default. Ratings agency Moody's also cut Greece's debt ratings by three notches to Ca on Monday, and said the chance of a default is now "virtually 100 percent".
"It is not that US congressmen will not raise the debt ceiling, but that they at odds over detailed plans. They are going to reach a deal in the end," Lee Seung-woo, an analyst at Daewoo Securities, said. "The European debt crisis appears to be nearing an end. The important thing is not whether Greece defaults or not, but whether the international community supports Greece," he said.
The Korea Composite Stock Price Index closed down 0.96 percent at 2,150.48 points. KOSPI 200 September futures fell 2.70 points to 281.40 and the KOSPI 200 spot index dropped 2.93 points to 279.66. The junior Kosdaq market finished down 0.25 percent at 529.90. Foreign investors resumed selling, offloading a net 65.3 billion won ($62.1 million) worth of shares.
Shares in POSCO erased early losses and finished up 0.42 percent as analysts expected its earnings to recover in the fourth quarter after bottoming out in the current quarter. Peer Hyundai Steel climbed 0.36 percent. Daewoo International skidded 5.36 percent after the trading and resource firm reported a 19 percent fall in operating profit on Friday.
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