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(LEAD) Seoul shares end lower after BOJ's surprise move

All News 15:56 April 28, 2016

(ATTN: UPDATES with bond yields at bottom)

SEOUL, April 28 (Yonhap) -- South Korean stocks closed lower on Thursday as investors digested mixed economic news, including the Federal Reserve's interest rate freeze and the Bank of Japan's additional stimulus hold-off in a rather surprising move. The Korean won rose sharply against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) dropped 14.48 points, or 0.72 percent, to 2,000,92. Trade volume was slim at 336.03 million shares worth 5.24 trillion won (US$4.6 billion), with losers outnumbering gainers 427 to 377.

Local shares started higher after the U.S. Federal Reserve on Wednesday stood pat on its policy interest rate, leaving the door open for a rate rise later this year amid improvement in the global economy and financial markets.

But the index slipped after the Japanese central bank on Thursday dashed investors' hopes for more stimulus, going against the market expectation for such a move.

"The Bank of Japan held steady its monetary policy in a surprise move, which drove down the Japanese shares. It was a trigger for accelerating selling in late afternoon trade," Suh Sang-young, an analyst at Kiwoom Securities, said. "On the supply side, foreigners turned to net sellers as they tried to lock in profits."

Foreigners snapped an 11-day winning streak to sell a net 196.95 billion won. Retail investors and institutions bought a net 87.07 billion and 111.38 billion won, respectively.

Tech shares were mixed as market heavyweights released earnings reports.

Top market cap Samsung Electronics sank 2.69 percent to 1,265,000 won after logging a 13.5-percent spike in its first-quarter net profit on robust sales of its flagship smartphones. Samsung said it will spend 2 trillion won to buy back its shares for cancellation.

Naver, the operator of South Korea's No. 1 portal, edged down 0.9 percent to 659,000 won after posting better-than-expected profit in the first three months of this year thanks to a surge in mobile ad sales.

SK Telecom, the nation's top mobile carrier, gained 3.44 percent to 210,500 won although it logged sluggish earnings during the period.

The local currency closed at 1,138.2 won against the greenback, up 10.1 won from Wednesday's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys fell 0.6 basis point to 1.450 percent, and the return on the benchmark five-year government bond shed 0.7 basis point to 1.552 percent.

ejkim@yna.co.kr
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