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South Korea: Shares fall below 1,900 point level; won down

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[SEOUL] South Korean shares slipped on Thursday morning as risk appetite contracted after falls on Wall Street overnight, while the Bank of Korea held its first policy meeting of the year.

The Korea Composite Stock Price Index (KOSPI) was down 1.3 per cent at 1,891.39 points as of 0056 GMT. Declining issues outnumbered advancers seven to one.

As widely expected, South Korea's central bank held its policy interest rate at a record low of 1.50 per cent on Thursday.

The market was awaiting a news conference by Bank of Korea Governor Lee Ju-yeol at 0220 GMT.

"Fears of yuan depreciation eased after the intervention from the PBOC, but the negative outlook for China's economy hasn't changed yet," said Kim Ye eun, a stock analyst at LIG Investment & Securities.

Mr Kim noted that poor US manufacturing activity figures, dragged by energy firms, could provide yet more unfavourable conditions for the global economy.

A so-called quadruple witching day falls on Thursday in Seoul, when stock futures and options as well as index futures and options, all expire. Generally, market volatility is heightened on such a day as investors unwind positions.

Meanwhile, foreign investors sold a net 80.8 billion Korean won (S$96 million) worth of KOSPI shares near mid-session, weighing on the index.

Shares in Samsung Electronics Co Ltd fell 1.1 per cent despite the company announced on Thursday it will mass produce mobile processors for Qualcomm Inc's new Snapdragon 820.

Steelmaker POSCO lost 1.8 per cent and chipmaker SK Hynix Inc tumbled 2.3 per cent.

The South Korean won fell against the dollar as market participants preferred less risky assets and remained jittery on China's yuan.

The currency was quoted at 1,211.4 on the dollar, down 0.6 per cent from the previous close of 1,204.0.

AFP