Seoul: Stocks slip; retail, institutional investors guard foreign sell-off

[SEOUL] South Korean shares closed marginally lower on Thursday, as domestic retail and institutional investors guarded a sell-off by foreign players, and as fears that central banks were close to considering winding back their emergency stimulus weighed.

The Kospi ended down 2.59 points or 0.08 per cent at 3,165.84, recovering from an early drop of 0.82 per cent.

Battery maker LG Chem fell 3.49 per cent, following a 6.73 per cent drop on Wednesday, as its unit LG Energy Solution said it would be voluntarily recalling its Energy Storage System batteries, costing the company around 400 billion won (S$474.2 million).

Among other heavyweights, chip giant Samsung Electronics fell 0.25 per cent, while internet giant Naver and Hyundai Motor dropped 1.38 per cent and 1.34 per cent, respectively.

South Korea's central bank upgraded its economic outlook and projected high consumer inflation, signalling an eventual tilt towards tightening to end its run of pandemic era record-low interest rates.

Foreigners were net sellers of 423.2 billion won worth of shares on the main board.

"Worries about outflows of passive funds, following a reduction in the weighting of local stocks on the MSCI benchmark, also weighed on Kospi but institutional investors increased their positions, guarding the declines," said Bookook Securities analyst Lee Won.

The won ended at 1,118.1 per dollar on the onshore settlement platform, 0.11 per cent lower than its previous close at 1,116.9.

In offshore trading, the won was quoted at 1,117.5 per dollar, down 0.1 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,117.1.

In money and debt markets, June futures on three-year treasury bonds rose 0.15 point to 111.02.

The benchmark 10-year yield fell by 2 basis points to 2.107 per cent.

REUTERS