Seoul shares slid on Friday as investor sentiment remained cautious on concerns over the US fiscal stand-off, and Europe's return to recession for the first time since 2009. Foreigners continued to offload South Korean stocks for the seventh consecutive session, selling a net 136.5 billion Korean won ($125.60 million) of shares over the period.
The Korea Composite Stock Price Index (KOSPI) closed down 0.5 percent at 1,860.83 points, extending losses after reaching its lowest closing since August 3 in the previous session. "Concern over the US fiscal cliff weighed on the index before the upcoming meeting between Obama and leaders of Congress [on Friday]," said Kim Ji-hyung, an analyst at Hanyang Securities. Investors will be watching Friday's meeting at the White House between President Barack Obama and Republican and Democratic leaders of Congress over deficit reduction for signs the two sides are moving closer.
Bluechips were mixed, with market heavyweight Samsung Electronics falling 1.8 percent. Hyundai Motor rose 1.9 percent and sibling Kia Motors rallied 6 percent as investors snapped up shares after recent declines saw both shares fall 11 percent or more since start of October. Shares in state-run utility Korea Electric Power Corp (KEPCO) gained 1.1 percent as South Korea unveiled a plan to secure extra power capacity and head off potential blackouts after the closure of two nuclear reactors.
Securities brokerages lost ground as a bill to bolster investment banking operations in local brokerages was stalled in a parliamentary subcommittee on Thursday, decreasing the likelihood of approval before parliament's current session ends. Among small- and mid-cap shares, S.M. Entertainment Co extended steep declines of the last two sessions by falling 15 percent after the K-Pop record label's third-quarter operating profit fell far below market forecasts. Decliners outnumbered gainers 585 to 241. The KOSPI 200 benchmark of core stocks closed down 0.5 percent, while the junior KOSDAQ slumped 2.2 percent lower.
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