Go to Contents Go to Navigation

(LEAD) S. Korean shares end lower on Samsung woes, U.S. rate hike fear

All News 16:03 October 11, 2016

(ATTN: ADDS bond yields at bottom)

SEOUL, Oct. 11 (Yonhap) -- South Korean shares closed sharply lower Tuesday as market kingpin Samsung Electronics suffered a steep drop caused by its decision to halt global sales of the Galaxy Note 7 smartphone but more so because of what local analysts called renewed fears of a U.S. rate hike. The local currency also lost ground against the U.S. dollar over such fears.

The benchmark Korea Composite Stock Price Index retreated 24.89 points, or 1.21 percent, to 2,031.93. Trading volume was slim at 338.8 million shares worth 5.12 trillion won (US$4.57 billion) with losers outnumbering gainers 408 to 391.

The index opened slightly lower as the tech giant Samsung Electronics said it will soon halt global sales of its latest smartphone that had already been under a global recall for battery problems.

Seo Sang-young, a Kiwoom Securities analyst, said what caused the index to further drop came later in the day.

"We believe the Samsung issue had already been played out, and that it will only last a day or two more. What caused the local index to join a downward rally of many other global markets, including those of Singapore, Taiwan and Hong Kong, was the Chicago Federal Reserve Bank president's remarks that hinted at a U.S. rate hike in December," he said.

Seo acknowledged the decision to halt global sales of the Galaxy Note 7 will inflict a considerable amount of loss on Samsung Electronics but insisted the company could easily make up for such a loss in other sectors, including its global-leading chipmaking business.

Samsung Electronics plunged 8.04 percent to 1,545,000 won.

Other major caps closed mixed.

Top automaker Hyundai Motor added 0.75 percent to 134,500 won, while its smaller affiliate Kia Motors advanced 0.84 percent to 42,050 won.

The automakers' auto parts making affiliate, Hyundai Mobis, retreated 1.61 percent to 274,500 won, while top portal operator Naver lost 1.15 percent to 862,000 won.

Most bank issues closed in positive terrain.

Shinhan Financial, the holding company of local industry leader Shinhan Bank, spiked 2.08 percent to 41,750 won, while KB Financial surged 2.04 percent to 40,000 won.

Foreign investors remained net sellers for a second consecutive session, offloading 336.6 billion won worth of local shares.

Retail investors sold a net 155.4 billion won, while institutions purchased a net 494.2 billion won.

The local currency closed at 1,120.40 won against the U.S. greenback, down 12.00 won from the previous session's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys surged 3.8 basis points to 1.373 percent and the return on the benchmark five-year government bond added 5.9 basis points to 1.437 percent.


Send Feedback
How can we improve?
Thanks for your feedback!