Seoul: Stocks mark worst day in over 2 weeks on institutional sell-off

[SEOUL] South Korean shares fell to their worst session in more than 2 weeks on Wednesday (Jan 5), as a stronger dollar and higher US yields weighed on tech heavyweights and institutional investors extended their sell-off in equities that went ex-dividend.

The Korean won hit a 12-week low, while the benchmark bond yield rose.

The benchmark Kospi ended down 35.27 points, or 1.18 per cent, at 2,953.97, marking its sharpest fall since Dec 20.

Among heavyweights, chip giants Samsung Electronics and SK Hynix fell 1.65 per cent and 2.33 per cent, respectively, while platform company Naver slid 2.87 per cent.

Institutional investors were net sellers of 1.34 trillion won (S$1.5 billion) worth of shares on the main board, according to Korea Exchange data, extending the selling spree to a fifth session.

Foreigners, however, were net buyers of 29.4 billion won worth of shares.

Institutional investors were seen closing out their positions after the ex-dividend date last week, while the won falling to near 1,200-level per dollar added pressure on Kospi, Daishin Securities' analyst Lee Kyoung-min said.

Meanwhile, analysts' estimates showed Samsung Electronics is likely to post a record fourth-quarter profit, due to solid demand for server memory chips and higher margins in contract manufacturing.

The won ended at 1,196.9 per dollar on the onshore settlement platform, 0.23 per cent lower than its previous close.

In offshore trading, the won was quoted at 1,197.1 per dollar, unchanged from the previous day, while in non-deliverable forward trading its 1-month contract was quoted at 1,197.2.

In money and debt markets, March futures on 3-year treasury bonds fell 0.15 point to 108.61.

The benchmark 10-year yield rose by 6.7 basis points to 2.381 per cent.

REUTERS