Seoul: Shares edge down on profit-taking; won falls

[SEOUL] Seoul shares edged down on Thursday morning on profit-taking after marking the sharpest gain in nearly four years in the previous session, as risk appetite contracted after falls in Wall Street overnight.

The Korea Composite Stock Price Index (KOSPI) was down 0.1 per cent at 1,932.98 as of 0235 GMT, while gainers outnumbered losers by 1.2 to 1. The KOSPI ended up 3 per cent on Wednesday, posting the biggest daily percentage rise since Dec 21, 2011. "After such a gain, more than 50 points, yesterday, a loss appears technical," said Kang Hyun-gie, a stock analyst at Dongbu Securities.

Mr Kang added that after recent corrections, prior leading gainers - growth stocks such as cosmetics and pharmaceuticals - are retreating, and investors see undervalued stocks such as chemicals and shipbuilders leading the broader market's gains, and are also underpinning the market during the current session.

A so-called quadruple witching day falls on Thursday this week in Seoul, when stock futures and options as well as index futures and options, all expire on the same day. Generally, market volatilities are raised on such a day as investors unwind positions.

Meanwhile, persistent foreign selling weighed on the main board as offshore investors were set to extend their selling into a 26th straight session, offloading a net 37.3 billion won (S$44.39 million) of KOSPI shares.

Market heavyweight Samsung Electronics Co Ltd shed 1.7 per cent, and steel maker Posco lost 1 per cent.

Mirae Asset Securities Co Ltd plunged 18 per cent after the securities brokerage announced after market close on Wednesday that it would carry out a 1.2 trillion won (S$1.43 billion) rights issue.

On the currency market, the South Korean won fell against the dollar as market participants preferred less risky assets following losses in Wall Street.

The won was down 0.5 per cent at 1,194.8 per dollar from the previous close of 1,189.4. "Investors are wary of intervention around 1,200 level by foreign exchange authorities (to curb the won's sharp fall),and uncertainty remains ahead of BoK's decision," said Yuna Park, a foreign-exchange analyst at Dongbu Securities.

The Bank of Korea's monthly monetary policy review is due on Friday, which is expected to hold rates steady, a Reuters survey found.

REUTERS