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Seoul: Stocks pare losses, won eases on risk-off mood
[SEOUL] South Korean shares pared earlier losses on Wednesday morning from weak oil prices and renewed demand for safe-haven assets, but sentiment was cautious ahead of this week's G-20 meeting.
The Korea Composite Stock Price Index (KOSPI) stood at 1,914.75 points as of 0221 GMT, virtually unchanged from the previous close of 1,914.22 points.
"Amid low volume trading, the correlation between oil and equities seems a bit weak today. I'd say that oil prices need to regain at least to US$35 a barrel in order to say they've finally come off the bottom," said Bae Sung-young, a stock analyst at Hyundai Securities.
Oil prices slid in early trading on Wednesday, extending sharp falls from the previous session after top exporter Saudi Arabia ruled out production cuts and industry data showed a further build in US crude stocks.
Shares of oil refiners and petrochemical firms underperformed, with SK Innovation Co Ltd sliding 0.7 per cent and Hanwha Chemical Corp falling 0.7 per cent.
The sub-index for construction stocks slumped 5.7 per cent, with KEPCO Plant Service & Engineering plunging 18.7 per cent on soft fourth-quarter earnings.
Foreign investors sold a net 27.1 billion won (S$30.85 million) worth of KOSPI shares, while individuals supported the main bourse by purchasing a net 50.2 billion won near the mid-session. The South Korean won drifted lower in thin trading amid the market's underlying risk-averse mood.
Sentiment for riskier assets was also hurt by China's decision to set a softer mid-point for the yuan, although most traders expect it to remain in a tight range before a meeting of G-20 finance ministers and central bankers starting on Friday.
The local currency was quoted at 1,236.4 against the US dollar, down 0.4 per cent from Tuesday's close of 1,231.1.
March futures on three-year treasury bonds shed 0.02 points to 110.19.