Seoul: Shares flat after c.bank rate cut; won down

[SEOUL] South Korean shares pared early gains and held steady by mid-morning on Friday, as foreign investors turned net sellers, expanding their net-selling streak.

The Korea Composite Stock Price Index (KOSPI) was quoted at 2,056.63 points against the previous close at 2,056.61. The KOSPI touched as high as 2,074.78 points.

Offshore investors are set to be net sellers for a fifth consecutive session. During the last four days, they offloaded a net 579.3 billion won (S$701.55 million) worth of KOSPI shares as of the end of Thursday.

The Bank of Korea's rate cut on Thursday could not bolster risk-on sentiment on Friday.

The central bank slashed borrowing costs to a record low of 1.50 per cent as policymakers raced to limit the economic damage wrought by an outbreak of the Middle East Respiratory Syndrome (Mers).

"The rate cut's effect would be limited to expand investments or consumption in local markets, considering the background of the cut - Mers," said Ryoo Yong-seok, an analyst at Hyundai Securities.

Naver Corp rose more than 5 per cent on bargain-hunting after hovering around 19-month lows over last five sessions.

SK Chemicals Co Ltd fell 2.3 per cent after the local patent watchdog ruled against SK Chemicals in favour of Pfizer Inc concerning a copycat pneumonia vaccine SK Chemicals had been developing based on a Pfizer drug.

The South Korean won edged down against the dollar after the greenback firmed due to strong US economic data that strengthened expectations the Federal Reserve could raise interest rates as early as September.

The won was down 0.2 per cent at 1,110.5 per dollar from the previous close at 1,108.8.

REUTERS