Seoul shares slipped on Friday with losses by financial firms including KB Financial weighing on the index amid regulatory worries, but gains in tech exporters including LG Display capped the downside. "A stronger dollar has prompted concerns that dollar-carry trade could recede, potentially pulling back foreign money invested in emerging markets," said Kim Young-june, a market analyst at SK Securities.
"Ratings downgrades on Greece have also fuelled worries about Western Europe, particularly of their banks," Kim added. But Seoul markets still managed to outperform the US stocks, given their recent set of losses, with the US dollar's strength on the won currency helping some exporters, analysts said. The Korea Composite Stock Price Index (KOSPI) finished down 0.80 points at 1,647.04 points.
Foreign investors were sellers of a net 199 billion won worth of stocks, and institutions bought a net 96.5 billion won. Banking issues lost ground amid Basel bank regulation concerns and following US peers' falls overnight on renewed earnings outlook worries.
Banks face having to set aside more funds or raise fresh capital from investors in as little as three years, according to proposals by a global regulatory body that could change the way bankers do business. US S&P financial slid after influential banking analyst Meredith Whitney cut her earnings estimates on Goldman Sachs Group Inc and Morgan Stanley.
"News reports on Basel raised concerns that, while not immediately, banks may face tighter regulations, which may make lending more difficult. This could potentially erode profitability," said Ku Yong-uk, an analyst at Daewoo Securities. Shares in KB Financial Group retreated 2.96 percent and Hana Financial Group declined 2.87 percent. "As the end of the year approaches, appetites for higher-dividend issues rise, while those for lower dividend issues weaken," said Kim.
In, an analyst at Eugene Investment & Securities, adding that banks' dividends this year were not likely to be generous. But technology exporters rose amid recent weakness in the won currency. Hynix Semiconductor, the world's No 2 memory chip maker, rose 2.61 percent and LG Display, the world's No 2 maker of flat screens, climbed up 2.75 percent. Samsung Electronics, the world's No 1 memory chip maker, advanced 1.05 percent.
Elsewhere shares in retailers outperformed markets after data showed on Friday that sales at South Korea's top three department stores rose in November for a ninth consecutive month, although the growth pace has slowed. Shares in Lotte Shopping ended flat and shares in Hyundai Department Store rose 0.45 percent.