Seoul shares down for 4th consecutive day

[THE INVESTOR] South Korean stocks closed lower on Aug. 29, extending their losing streak to a fourth day on concerns that the US may soon raise its key interest rate. The local currency sharply lost ground against the US dollar.

The benchmark KOSPI dropped 5.15 points, or 0.25 percent, to 2,032.35. Trade volume came to 314.35 million shares worth 3.80 trillion won (US$3.30 billion), with losers outnumbering gainers 668 to 157.

Foreigners net-purchased 83.4 billion won worth of stocks, while institutional investors and individuals sold a net 42.3 billion won and 39.4 billion won worth of stocks, respectively,

Investor sentiment was apparently hurt by comments by US monetary policymakers.

US Federal Reserve Chair Janet Yellen openly said last week that “the case for an increase in the federal funds rate has strengthened in recent months.”

Analysts here do not rule out the possibility that the rate will be raised in September.

“The chances of a US rate hike has grown. But its impact on South Korea’s stock market will be limited,” said Han Dae-hoon, an analyst at SK Securities. Usually, the KOSPI has recorded a 2-3 percent drop, affected by such a US rate issue, he pointed out.

Market watchers will also closely monitor US job data to be released on Sept. 1 and the results of the G-20 Leaders’ Summit scheduled to open in the eastern Chinese city of Hangzhou on the weekend.

Large caps closed mixed, meanwhile, with market bellwether Samsung Electronics adding 1.74 percent to 1,640,000 won.

Leading automaker Hyundai Motor slipped 1.11 percent to 134,000 won and its smaller affiliate Kia Motors also lost 1.53 percent to 41,700 won.

Naver, the dominant internet portal here, advanced 0.62 percent to 810,000.

The local currency closed at 1,124.95 won against the US dollar, down 11.25 won from the previous session.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys gained 3.1 basis points to 1.272 percent and the return on the benchmark five-year government bond added 3.1 basis points to 1.301 percent.

(theinvestor@heraldcorp.com)