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Roundup: S. Korean shares fall on Fed's rate hike concerns

Xinhua, March 9, 2015 Adjust font size:

South Korean shares fell sharply Monday on concerns that the U.S. Federal Reserve may hike interest rates earlier than anticipated after better-than-expected employment data.

The benchmark Korea Composite Stock Price Index (KOSPI) declined 20.12 points, or 1 percent, to 1,992.82 at the close. Trading volume stood at 292.97 million shares worth 3.94 trillion won (3.55 billion U.S. dollars).

Employers in the United States added 295,000 jobs in February, beating market consensus of about 240,000 jobs added. The jobless rate declined to 5.5 percent, the lowest in about seven years.

The stronger U.S. labor market triggered expectations that the U.S. Fed may raise interest rates as early as in June after having kept the policy rate between zero and 0.25 percent since 2008.

Market sentiment, which was boosted last week by quantitative easing in Europe, weakened as Wall Street lost 1.5 percent last weekend on concerns over the Fed's rate increase.

Foreigners turned into net sellers in 11 trading days, reducing stock holdings by 64.6 billion won. Retail investors bought a net 223 billion won worth of stocks, but local institutions offloaded stocks worth 176.2 billion won.

Large-cap shares lost ground. Market bellwether Samsung Electronics declined 1.5 percent, and top automaker Hyundai Motor slid 2.3 percent. Memory chip giant SK Hynix retreated 2.4 percent, and Naver, the most-used search engine, tumbled 4 percent.

The South Korean won fell sharply to the U.S. dollar on worries about the Fed's rate increase. The South Korean currency finished at 1,112.1 won against the greenback, down 13.4 won from Friday's close.

Expectations emerged that the Fed may omit the phrase of being "patient" before the interest rate increase, which would further bolster the dollar's strength against its peers.

Bond prices ended mixed. Yields on the liquid three-year treasury notes fell 1.9 basis points to 1.924 percent, but the return on the benchmark 10-year government bonds added 4.2 basis points to 2.371 percent. Endi