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Seoul stocks, won slump on Pyongyang's nuke test, Samsung

All Headlines 16:01 September 09, 2016

SEOUL, Sept. 9 (Yonhap) -- South Korean stocks dropped more than 1 percent Friday, as investors were spooked by North Korea's nuclear test and a sharp drop in top market Samsung Electronics, analysts said. The Korean won fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) shed 25.86 points, or 1.25 percent, to close at 2,037.87. Trade volume was moderate at 387 million shares worth 4.16 trillion won (US$3.79 billion), with losers outnumbering gainers 591 to 218.

South Korean stocks opened weak on overnight falls on Wall Street but extended losses following news that North Korea has conducted its fifth nuclear test in defiance of international pressure to stop its nuclear program.

The index hit as low as 2,029.46 at one point but pared earlier losses in the afternoon.

U.S. stocks closed lower Thursday on a slump in tech stocks, with the Dow Jones industrial average losing 0.3 percent to 18,479.91 points in the face of a dip in Apple Inc. The U.S. tech giant fell 2.5 percent as its latest iPhone 7 failed to appeal to Wall Street.

Adding to woes, North Korea conducted its fifth nuclear test earlier in the day as a massive earthquake was detected near its nuclear site in its northeastern region.

"Overnight falls in the U.S. stock market, coupled with North Korea's nuclear test, sapped investor sentiment here," said Lee Sang-hwa, an analyst at Hyundai Securities. "Also, Samsung Electronics' slump weighed down the overall market sentiment."

North Korea claimed that its nuclear test was successful, stoking concerns over geopolitical tensions in the region amid international efforts to curb the communist state's nuclear ambitions.

Analysts said the North's nuke test may have a limited impact on the local stock market as proven by past nuclear tests. It, however, may roil the market for a short period of time.

As widely expected, the Bank of Korea, the country's central bank, froze its policy rate at a record low of 1.25 percent

Top market cap Samsung Electronics sank 3.9 percent to end at 1,575,000 won as foreign investors dumped shares to lock in recent gains. The world's largest manufacturer of smartphones has rallied in recent weeks on hopes of improved earnings.

Naver, the top Internet portal operator, shed 2.53 percent to 847,000 won, and SK hynix, a major chipmaker, advanced 0.65 percent to 38,950 won.

Hyundai Motor, the country's top automaker, rose 0.36 percent to 139,500 won, while AmorePacific, the No. 1 cosmetics maker, fell 2.26 percent to 390,000 won. POSCO, the country's No. 1 steelmaker, remained flat at 231,500 won.

The local currency closed at 1,098.40 won against the U.S. dollar, down 5.8 won from the previous session's close.

sam@yna.co.kr
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