Seoul shares declined on Thursday, weighed down by foreign selling following US Fed comments on mortgage debt purchases, but Doosan Engineering rose on news of a share cancellation plan. The Korea Composite Stock Price Index (KOSPI) ended down 1.03 percent at 1,693.88 points.
"Markets seem concerned about uncertainties following the US Fed's comments, and combined with the market's recent big gains, shares are coming under pressure," said Bae Sung-young, a market analyst at Hyundai Securities. The Federal Reserve on Wednesday upgraded its assessment of the US economy, and also said it would slow its purchases of mortgage debt, in a move toward withdrawing the central bank's extraordinary support for the economy and markets.
Bae added however that losses would likely be short-termed, with investors closely following won-dollar exchange rates. Falls in US futures, hinting at weak trading in US markets on Thursday, also weighed on sentiment. S&P 500 index futures fell 0.2 percent and Dow Jones Industrial Average index futures shed 0.13 percent. Foreign investors turned net sellers after a 14-session buying streak, offloading a net 105.8 billion won ($88.42 million) worth of stocks.
Some key exporters declined, with Samsung Electronics, the world's No 1 memory chip maker, losing 2.07 percent and Hyundai Motor, South Korea's top automaker, shedding 3.49 percent. But Doosan Engineering & Construction gained 1.8 percent after the company said on Thursday it planned to cancel shares worth 14.4 billion won ($12.03 million). The company said it would start buying shares for cancellation between September 28 and December 24.
Hankook Tire rose 5.94 percent after local media reports quoted the tyre maker's vice-president as saying the it was working to win a supply deal with Japan's Toyota Motor Corp. "Orders from Japanese automakers such as Toyota could accelerate Hankook's brand image enhancement and we would view the order positively if it were to be finalised," Morgan Stanley said in a note on Thursday.
A sharp fall in Baltic Dry Index, which measures the cost of shipping key commodities, weighed on shipbuilders and shipping issues. Hyundai Heavy Industries declined 3.47 percent and Hanjin Shipping fell 4.14 percent. Brokerages retreated as stocks markets turned slightly weaker. Woori Investment & Securities went down 3.56 percent and Daewoo Securities lost 3.37 percent. Retail investors purchased a net 304.9 billion won worth of shares, and institutions sold a net 190 billion won. Decliners led advancers 573 to 212, with 86 counters ending flat.
A total of 414.6 million shares worth 7.5 trillion won changed hands, compared with 497 million shares worth 7.54 trillion won traded on Wednesday. The KOSPI 200 December futures index fell 2.60 points to 222.80, while the KOSPI 200 spot index ended down 2.34 points at 222.35. The junior Kosdaq market ended down 1.93 percent at 518.77 points.