Seoul shares experienced their biggest one-day loss for two weeks on Wednesday, as exporters such as Samsung Electronics fell on worries about more rises in US interest rates cooling the key American market. The minutes of the US Federal Reserve's May meeting issued on Tuesday showed the Fed's policy makers believed there was "a discernible upcreep" in inflation. The wording was taken as a sign it would continue lifting interest rates at a "measured" pace of 25 basis points at a time.
"It raises the question of how many more times the Fed plans to raise interest rates," said Lim Chang-gue, a fund manager at Samsung Investment Trust Management.
The benchmark Korea Composite Stock Price Index (KOSPI) closed down 1.08 percent to end at 941.30, its biggest one-day percentage slide since falling 1.17 percent on May 11.
Higher US, interest rates could raise worries about a slower US economy, a key market for local exporters.
Shares in Samsung Electronics Co Ltd, the world's top maker of memory chips, fell 2.12 percent to 484,500 won. Hyundai Motor Co, South Korea's top auto maker, fell 1.62 percent to 54,800 won, while LG Electronics Inc fell 1.66 percent to 71,000 won.
Exporters were also hurt as oil prices climbed towards $50 a barrel. US crude futures were trading at $49.72 a barrel, up from its $49.67 settlement price in US trade on Tuesday.
POSCO Co Ltd, the world's fifth-biggest steel maker by output, fell 1.67 percent to 177,000 won, also unsettled by worries about steel prices.
Among gainers, shares in department stores rose as investors bet sales would rise amid expectations for a recovery in consumer demand later this year.
Trade volume reached around 277 million shares worth 1.7 trillion won, compared to 321.2 million shares worth 1.7 trillion won on Tuesday. Losers nearly doubled gainers by 473 to 229 with 88 titles ending flat.
Foreign investors bought a net 22.5 billion won in shares on the main bourse, according to data at 0633 GMT, while retail investors sold a net 14.1 billion won in shares. Institutional investors sold a net 12.9 billion won.
The June KOSPI 200 futures index fell 1.45 points to 121.45 and the underlying KOSPI 200 spot index declined 1.54 points to 121.37.
NEW STOCK EXCHANGE INDEX:
The Korea Exchange (KRX), which oversees South Korea's main stock indices, said on Wednesday it would introduce a new benchmark index on June 1 made up of 100 of the biggest South Korean stocks by market capitalisation.
The new index would complement existing benchmark indexes, such as the Korea Composite Stock Price Index (KOSPI) and the Kosdaq, a spokesman at the exchange said. The KRX 100 index would include 87 shares traded on the main KOSPI and 13 from the tech-heavy Kosdaq market, so investors could better gauge the performance for both, the exchange said in a statement.