Now offering wire transfer and ACH payment methods!

Currency News

South Korean shares fall to 5-week low on oil plunge; won lower

Thursday, 11 December 2014 09:37

Posted by Shoaib-ur-Rehman Siddiqui

SEOUL: South Korean shares dipped to a 5-week low on Thursday, tracking overnight falls on Wall Street as plunging oil prices weighed on energy counters.

The Korea Composite Stock Price Index (KOSPI) was down 0.8 percent at 1,929.95 points as of 0145 GMT.

The market showed little reaction to a decision by South Korea's central bank to hold policy interest rate steady, which had been widely expected. Traders were instead looking to comments from the central bank governor at a later news conference.

Oil-linked shares led declines after crude prices continued to plumb a string of five-year lows on persistent fears of oversupply and sluggish demand.

LG Chem fell 1.9 percent while Hyundai Heavy Industries, a shipbuilder heavily reliant on orders for drilling rigs and offshore platforms, slipped 1.2 percent.

The wider bourse was down across the board with all 17 KRX industry sub-indices in negative territory, as signs of slowing growth in China and renewed concerns over Greece's debt future dampened risk appetites.

"The market has been treading water for too long and investors have found the right excuse to take profits at the sudden appearance of negative headlines, triggering a spike in volatility," said Chun Jung-hoon, an analyst at Kiwoom Securities.

The benchmark KOSPI 200 was down 0.71 percent while the junior, tech-heavy KOSDAQ edged 0.22 percent lower.

Offshore players dumped a net 210.9 billion won ($191.94 million) worth of KOSPI shares by late morning, after having snapped an eight-day buying streak on Wednesday amidst a global safe-haven flight.

The South Korean won firmed against the dollar on Thursday to track a recovery in the Japanese yen, although gains were capped as foreign investors sold off local equities.

The won was quoted at 1,098.8 to the dollar as of 0145 GMT, compared to Wednesday's closing rate of 1,102.2.

"Profit-taking on the dollar is continuing as investors shed some weight on their overloaded long positions, especially as falling US bond yields took some of the shine off the greenback," said Hong Seok-chan, an FX strategist at Daishin Economic Research Institute.

Investors will be keeping a close eye on the upcoming rate meeting by the US Federal Reserve for any clues on the timing of the central bank's next interest rate hike.

December futures on three-year treasury bonds added 9 basis points to trade at 107.96.

original source:

Back to Top