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Seoul: Shares and won fall as Yellen keeps rates hike view

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[SEOUL] Seoul shares fell on Friday morning on persistent foreign selling, and the South Korean won slipped after Federal Reserve Chair Janet Yellen said the US central bank is still on track to raise rates this year.

The Korea Composite Stock Price Index (KOSPI) was down 0.7 per cent at 1,933.50 points as of 0222 GMT. "Market (participants) seemed to adopt a wait-and-see mode and to keep watching the Fed's moves...though Yellen's saying rates can go up this year would be a factor in easing uncertainty around the Fed's monetary policy," said Kim Young-jun, an analyst at SK Securities.

Lee Kyung-min, a stock analyst at Daishin Securities, said Yellen's remarks could lead to new worries over the timing of the rates hike as her comments didn't seem to be consistent with what she said last week.

Fed Chair Yellen, who spoke a week after the Fed delayed a long-anticipated rate hike, said she and other Fed policymakers do not expect recent global economic and financial market developments to significantly affect the central bank's policy.

Market heavyweight Samsung Electronics Co Ltd lost 1.1 per cent. Steelmaker Posco fell 1.7 per cent.

Meanwhile, Hyundai Motor Co Ltd gained 2.9 per cent and Hyundai Glovis Co Ltd rose 5.4 per cent after Hyundai Motor Vice Chairman and heir-apparent Chung Eui-sun bought 500 billion won (S$594.9 million) worth shares in Hyundai Motor.

Foreigners were set to be net sellers for a fifth consecutive session, with offloading a net 101.5 billion won worth of shares in the main bourse.

On the currency market, the South Korean won was down 0.3 per cent at 1,196.6 per dollar, set to fall for a fifth consecutive session.

Yuna Park, a foreign-exchange analyst at Dongbu Securities, said the won was pressured down by the Fed Chair's remark, and offshore selling of South Korean shares also weighed on the won.

December futures on three-year treasury bonds were up 0.03 points at 109.73.

South Korean financial markets will be closed for the long holiday weekend and will reopen on Sept 30.

REUTERS