Seoul: Shares drift after worst fall in a year; won lower

[SEOUL] South Korean shares drifted near 16-month lows on Wednesday, with risk appetites suppressed by the extended rout in oil prices and political uncertainty in Greece.

The Korea Composite Stock Price Index (KOSPI) was down 0.01 per cent at 1,882.21 points as of 0150 GMT.

The main bourse had its biggest one-day fall in a year on Tuesday as investors across the globe sold risky assets to seek shelter in safe havens.

"Weak oil prices and the fallout from a theoretical Greek exit (from the euro) are providing the subtext for a more tangible weakness close to home... fears over an earnings shock," said Kang Hyun-chul, an analyst at NH Investment & Securities.

Korean Air was one of Wednesday's top losers on the main board, plummeting more than 10 per cent after announcing a plan to issue 500 billion won (US$455.1 million) worth of new shares.

Bank shares were stung by risk aversion. Shinhan Financial Group slid 2 per cent and Industrial Bank of Korea fell 1.1 per cent.

Commodity-linked assets such as energy and shipyard counters edged higher, as investors bought them on the dip after heavy recent losses inflicted by falling oil prices.

SK Innovation, South Korea's largest refiner, gained 0.8 per cent and Daewoo Shipbuilding & Marine Engineering was 0.9 per cent higher.

The KRX Shipbuilding and KRX Energy indices have plunged 53.4 per cent and 32.0 per cent respectively over a one-year period, the two worst performers out of 17 industry sectors tracked by the main exchange.

LG Display was one of Wednesday's few bright spots, rallying 3 per cent to extend sharp gains after analysts predicted a rosy first quarter outlook for the screenmaker.

The South Korean won reversed early gains to edge lower on Wednesday, as the ongoing global risk flight triggered more foreign capital outflows from domestic equity markets.

The local currency was quoted at 1,099.9 to the dollar as of 0150 GMT, compared to 1,098.8 at the end of Tuesday's session.

Offshore investors slashed a net 130.4 billion won (US$118.7 million) of KOSPI stocks from their portfolios by late morning.

March futures on three-year treasury bonds added 3 basis points to trade at 108.37.

REUTERS