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Seoul: Shares fall on earnings woes; won sinks after Q2 GDP
[SEOUL] South Korean shares fell to more than 1-week lows on Thursday on concerns about weak earnings from key sectors and as home-builders fell in reaction to government measures aimed at containing household debt growth.
The won fell sharply to a fresh 2-year low against the dollar after the central bank estimated South Korea's economic growth during the past quarter to have slowed more than had previously been thought.
The Korea Composite Stock Price Index (KOSPI) was down 0.1 per cent at 2,062.17 points as of 0335 GMT after hitting a session low of 2,053.52, its lowest intraday level seen since July 14.
"Expectations for strong earnings growth are waning and this combined with the household debt measures to hurt the overall trading sentiment today," said Lee Jae-man, a market strategist at Hana Daetoo Investment & Securities.
The construction sector's index fell 4.0 per cent to 147.31 points on expectations that the government's household debt measures, announced on Wednesday, would at least slow the housing market's recovery.
Chin Hung International fell 11.3 per cent to 3,490 won, Kolon Global Corp lost 5.3 per cent to 22,400 won and Hyundai Engineering & Construction dropped 5.4 per cent to 38,100 won.
Bucking the market's weakness, automaker Hyundai Motor Co jumped 4.6 per cent to 137,000 won after announcing an interim dividend of 1,000 won per share.
Chipmaker SK Hynix also shone, up 2.6 per cent at 39,150 won, as its plan to buy back 859 billion won worth of its own shares outweighed a weak second-quarter earnings report.
In the local currency market, the won fell 0.8 per cent to 1,162.7 per dollar to touch its weakest intraday level since June 25, 2013.
The central bank said before markets opened that South Korea's economic growth during the April-June period more than halved to 0.3 per cent in sequential terms from 0.8 per cent in the previous quarter.
The weak economic growth data and the losses in stock prices both helped lift bond futures, with the front-end futures on 3-year treasury bonds rising 0.07 points to 109.33.