Seoul: Shares slip as Japan recession rekindles yen fears; won higher
[SEOUL] South Korean shares edged lower on Monday on nagging fears over a weak Japanese yen and its impact on Korean exporters, though bargain-hunting in battered sectors supported the market.
The Korea Composite Stock Price Index (KOSPI) was down 0.2 per cent at 1,941.20 points as of 0205 GMT.
Japan's GDP data, released shortly before Seoul's opening bell, showed the world's third-largest economy had slid into a surprise recession in the third-quarter.
The yen briefly tumbled to a fresh 7-year low of 117.04 against the dollar on the news, amplifying worries that a soft yen could undercut the price competitiveness of Korea exporters who compete in many sectors with Japanese rivals.
"With the dollar rally gaining steady momentum again, concerns over exchange rate volatility are making it difficult for offshore investors to bet on Korean equities," said Lee Aram, an analyst at NH Investment & Securities.
"The market is likely to wander aimlessly for the time being in accordance with movements in the dollar, yen and won," Lee said.
The market found limited support as bargain hunters picked up underperforming sectors such as shipyards and energy.
Hyundai Heavy Industries rose 3 per cent and LG Chem 2.5 per cent.
Samsung SDS gained 0.5 per cent on its second day of trading after a successful market debut on Friday, where its shares closed 72.3 per cent higher than its IPO price.
The South Korean won was a shade higher on Monday morning. Local exporters took profits on dollar holdings for domestic settlements with the psychologically important 1,100 level providing short-term technical support for the local currency.
The won was quoted at 1,098.2 to the dollar as of 0205 GMT, compared to Friday's close of 1,100.5.
REUTERS
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