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S. Korean shares fall on expected U.S. rate hike

Xinhua, August 22, 2016 Adjust font size:

South Korean shares fell Monday on expectations that the U.S. Federal Reserve would raise interest rate as early as next month.

The benchmark Korea Composite Stock Price Index (KOSPI) declined 14.08 points, or 0.68 percent, to settle at 2,042.16. Trading volume stood at 340 million shares worth 4 trillion won (3.56 billion U.S. dollars).

The KOSPI took off a weak start and extended initial losses throughout the session on expectations for the Fed's rate hike in September. Investors are waiting for Fed Chair Janet Yellen's comments on Friday at the Jackson Hole symposium.

Market watchers said Yellen's upcoming speech may become a turning point for the local stock market.

Foreign investors turned into net sellers in six trading days by selling 15 billion won worth of stocks. Institutional investors dumped shares worth 181 billion won, but individual investors raised stock holdings by 86 billion won.

Most large-cap shares lost ground. Market bellwether Samsung Electronics edged down 0.6 percent as investors sold stocks to lock in recent profits. Top automaker Hyundai Motor dipped 0.4 percent, and the most-used search engine Naver slipped 1.2 percent. The biggest auto parts maker Hyundai Mobis fell 0.2 percent, but memory chip giant SK Hynix advanced 1.6 percent.

LG Chem and Samsung SDI, which produce electric vehicle batteries, gained ground on news report that U.S. automaker Tesla is receiving preliminary orders on the Internet ahead of the company's foray into South Korean market.

The tech-savvy KOSDAQ tumbled 8.05 points, or 1.16 percent, to 688.15 at the close as foreign and institutional investors sold shares worth 31 billion won and 58 billion won each.

Kakao, the biggest mobile messenging operator, sank 2.4 percent to fall to the lowest close in 52 weeks. The company kept a downward trend for eight straight sessions due to negative second-quarter earnings results.

South Korean currency finished at 1,126.5 won against the greenback, down 8.9 won from Friday's close.

Bond prices ended lower. Yields on the liquid three-year treasury notes added 0.1 basis points to 1.232 percent, and returns on the benchmark 10-year government bonds rose 1.3 basis points to 1.435 percent. Endit