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Seoul: Stocks, won stutter as investors on guard before Brexit vote
[SEOUL] South Korean shares and won failed to build on the previous days gains, as investors were wary of becoming carried away by hopes that Britain will vote to stay in the European Union.
If Britain does opt to remain in Thursday's referendum, analysts expect investors to rediscover their taste for riskier assets, like South Korean shares, but a vote to leave would damage the European markets for South Korean exporters.
Reflecting the uncertainty, the Korea Composite Stock Price Index (Kospi) flitted in and out of positive territory to stand 0.1 per cent down at 1,979.42 points.
The won was quoted at 1,156.4 to the dollar, up 0.4 per cent compared with Monday's close of 1,160.8 after slipping 0.2 per cent in earlier trade.
"The Kospi is likely to rebound this week since economic data from other countries have been positive and the current won level is still cheap enough to support foreign buying," said Chow Byung-hyun, a stock analyst at Yuan Securities.
For the day, Chow added that weak exports data released earlier in the day had cast some gloom, although its impact was limited.
South Korea's exports during the June 1-20 period dropped 12.8 per cent to $25.659 billion in annual terms, customs data said on Tuesday.
Full month figures will be released next week.
Offshore investors were poised to be sellers, offloading a net 149.3 billion Korean won (S$173 million) worth of Kospi shares near mid-session, weighing on the index.
Software services firm Samsung SD Co Ltd lost 2.6 per cent after it said it decided against buying back its own shares or paying an interim dividend after considering requests from some shareholders.
Shares of Samsung SD Co Ltd slumped as much as 6.7 per cent and LEG Chemo Ltd 5.6 per cent on media reports that China may not give out subsidies to electric vehicles powered by batteries made by the South Korean firms.
Decliners outnumbered advancers 479 to 311.
June futures on three-year treasury bonds gained 0.01 point to 110.56.