Seoul, May 19 (IANS) South Korean stocks closed markedly lower on Monday as investors grew cautious over the impact of global credit rating agency Moody’s downgrade of the United States’ credit rating. The local currency weakened against the US dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) lost 23.45 points, or 0.89 percent, to close at 2,603.42, reports Yonhap news agency.
Trade volume was thin at 309.7 million shares worth 6.69 trillion won (US$4.79 billion), with losers beating winners 642 to 240.
The index opened lower and extended its losses to drop more than 1.2 percent before trimming some of the earlier declines.
Institutions and foreign investors sold off a net 194.76 billion won and 113.88 billion won worth of stocks, respectively, while individuals bought 298.67 billion won worth of shares.
Investor sentiment was dampened by news that Moody’s downgraded the U.S. sovereign credit rating by one notch, from Aaa to Aa1, on Friday (U.S. time), citing concerns over the country’s ballooning deficit and rising interest costs.
“The rating downgrade could trigger a market correction, though it is expected to remain a short-term factor,” Han Ji-young, a researcher at Kiwoom Securities, said.
South Korea’s finance ministry warned of heightened volatility and pledged to closely monitor financial and foreign exchange markets, while noting that the downgrade is expected to have only a limited impact.
Tech and auto shares lost ground to weigh on the index.
Market bellwether Samsung Electronics fell 1.76 percent to 55,800 won, and its rival SK hynix sank 2.49 percent to 199,400 won.
Top carmaker Hyundai Motor tumbled 1.44 percent to 191,000 won, and its sister Kia Motors dipped 0.54 percent to 91,500 won.
Defence giant Hanwha Aerospace shed 0.24 percent to 839,000 won, and No. 1 steelmaker POSCO Holdings retreated 0.81 percent to 245,500 won. Top online portal operator Naver decreased 1.28 percent to 185,400 won.
Bio shares finished mixed. Leading biotech firm Samsung Biologics soared 2.59 percent to 1.03 million won, while Celltrion remained unchanged at 154,000 won.
But major battery maker LG Energy Solution rose 0.34 percent to 291,500 won, and leading chemical firm LG Chem climbed 1.14 percent to 195,800 won.
The local currency was quoted at 1,397.8 won against the greenback at 3:30 p.m., down 8.2 won from the previous session.
–IANS
na/
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