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Seoul: Stocks decline after ECB easing measures; won up
[SEOUL] South Korean shares slid on Friday morning as the European Central Bank's easing measures fell short of market forecast amid expectations US interest rates are set to rise this month.
The Korea Composite Stock Price Index (KOSPI) was down 0.9 per cent at 1,975.33 points by 0254 GMT, set for its third straight day of decline. Losers outnumbered gainers by nearly 3-to-1.
On Thursday, Federal Reserve Chair Janet Yellen stated the United States may be "close to the point at which we should be raising" interest rates, and continued to reinforce an upbeat view of the US economy. November payrolls are due later in the day.
The ECB cut its deposit rate by the minimum 0.1 per centage points to -0.3 per cent and extended its asset purchase programme but did not increase the amount of government bonds it buys each month.
"Disappointed investors will now hone in on the Fed's policy meeting on Dec. 15-16," said Kim Yong-goo, a stock analyst at Samsung Securities, noting CME Group Fed Watch showed 79 per cent probability of a rate hike at the December meeting.
Chemical and electricity & gas sectors led decliners on the main bourse, with LG Chem Ltd and Korea Electric Power Corp losing 1.4 per cent and 1.5 per cent, respectively.
On the other hand, shares of LG Electronics Inc and LG Display Co Ltd both gained 1.3 per cent and 3.4 per cent.
Offshore investors sold a net 212.8 billion Korean won ($184.00 million) worth of KOSPI shares near mid-session, weighing on the index.
The South Korean won stood at 1,156.8 per dollar, up 0.7 per cent from Thursday's onshore close of 1,164.6.
"Though investors expected a 'full-package' easing measures (from the ECB), local currency gains will be limited by foreign stock selling," said Jeon Seung-ji, a fixed-income analyst at Samsung Futures.
December futures on three-year treasury bonds lost 0.1 points to 109.16.