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S. Korean shares close lower on rate hike woes

All Headlines 15:53 October 13, 2016

SEOUL, Oct. 13 (Yonhap) -- South Korean shares closed sharply lower Thursday as institutions turned to selling in an attempt to cash in early gains, ending their three-day buying streak. The local currency also weakened against the U.S. dollar as the country's central bank kept its key rate steady for the month despite what many believe is a looming U.S. rate hike in the near future.

The benchmark Korea Composite Stock Price Index (KOSPI) lost 18.29 points, or 0.90 percent, to 2,015.44. Trading volume was moderate at 430 million shares worth 4.33 trillion won (US$3.81 billion) with losers greatly outnumbering gainers 635 to 184.

The index had opened on an upbeat note, partly helped by overnight gains on Wall Street, but the earlier gains were quickly lost as institutions sought to lock in early gains.

Institutions offloaded a net 569.6 billion won, while foreign investors scooped up a net 194.2 billion won, ending their three-day selling streak that began at the start of the week. Retail investors purchased a net 375 billion won.

"The index had remained closer to the upper ceiling of the box throughout the week, so a technical adjustment had been expected even without any clear leads," Mirae Asset Daewoo analyst Ko Seung-hee said.

"In the short-run, a stronger dollar does create certain concerns as it means increased prices of the country's exports. The KOSPI may continue to drop for some time due to uncertainties over a U.S. rate hike, but the rate of drop will not be too great or rapid," he added.

The local currency closed at 1,135.90 won against the U.S. greenback, down 12.30 won from the previous session's close.

Most major caps ended in negative terrain.

Market bellwether Samsung Electronics gained 1.43 percent to 1,557,000 won, slightly rebounding from three consecutive sessions of drop triggered by its decision to halt global sales of its Galaxy Note 7 smartphone over battery-related problems.

Top automaker Hyundai Motor plunged 1.83 percent to 134,000 won, with its smaller affiliate Kia Motors losing 0.94 percent to 42,000 won.

Top portal operator Naver tumbled 4.28 percent to 827,000 won, while global steelmaker POSCO retreated 2.99 percent to 227,500 won.

bdk@yna.co.kr
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