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South Korea: Stocks inch down as foreigners offload equities over MSCI rebalancing

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The Seoul stock market's main KOSPI closed down 2.15 points, or 0.10 per cent, to 2,121.35.

[SEOUL] South Korean shares inched down on Tuesday as foreigners sold equities over the rebalancing of MSCI index, capping earlier gains from optimism towards an interim trade deal between the United States and China.

The Seoul stock market's main KOSPI closed down 2.15 points, or 0.10 per cent, to 2,121.35.

The KOSPI has risen 3.93 per cent so far this year, of which 2.7 per cent of the gains came in the previous 30 trading sessions.

The trading volume during the session in the KOSPI index was 524.31 million shares and, of the total traded issues of 906, the number of advancing shares was 532.

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Foreigners were net sellers for a 14th session having sold US$727.53 million worth of shares on the main board.

This was the longest decline since late Jan 2016.

Analysts saw the selloff of foreigners continuing because of the rebalancing of MSCI index, rather than external risks.

"Though there were favourable news in the market to lift KOSPI today, foreigners extended their selloff over the rebalancing of MSCI index," said Noh Dong-kil, an analyst at NH Investment & Securities.

Earlier this month, global index provider MSCI said the mainland Chinese stocks, or A shares, will rise to a weight of 4.1 per cent in the MSCI Emerging Market Index, up from 2.55 per cent currently, which raised concerns over a weight decrease for South Korean shares.

On Tuesday, China's commerce ministry said Vice Premier Liu He, US Trade representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin had a telephonic talk on issues related to a phase one trade agreement.

REUTERS