South Korean stocks continued their tepid trading on Wednesday amid absence of a fresh driver to move the market, with foreigners snapping up shares while institutions went on selloff, analysts said. The local currency rose against the dollar.
After swerving in and out of positive terrain, the Korea Composite Stock Price Index added 1.44 points, or 0.07 percent, to 2,042.81. Trading volume was moderate at 416.8 million shares worth 4.98 trillion won ($4.52 billion) with gainers outnumbering decliners 467 to 322.
Analysts said institutions, notably mutual funds, weighed on the market as they extended their selling streak to a sixth consecutive session, worth a combined net 875 billion won.
"A selloff from mutual funds is putting pressure on the KOSPI's gains. But we expect them to back away from the selling binge soon, possibly led by the pension fund," said Kim Sung-hwan, an analyst at Bookook Securities Co.
While prospects of a strong foreign inflow remain high, net selling by institutions will be among factors that hold back the KOSPI from going up further, they said.
Offshore investors bought more shares than they sold at 114.9 billion shares. Individuals also scooped up a net 101 billion won.
Large-cap shares finished mixed. Samsung Electronics gained
0.61 percent to 1,485,000 won, while Hyundai Motor fell 2.86 percent to 170,000 won.
By sector, brokerage houses were bullish, with Mirae Asset Securities climbing 1.74 percent to 49,650 won. In contrast, banks were among the biggest decliners, with state-run Industrial Bank of Korea losing 2.25 percent to 13,050 won.
The tech-laden KOSDAQ closed at 651.05, reaching the highest point in more than six years, buoyed by gains in top-listed firms including bio-pharmaceutical firm Celltrion Inc. The last time the secondary index had breached the 650 mark was June 2, 2008.
The local currency ended up 3.8 won to 1,100.80 won against the greenback, slowing from its sharp rise seen in the previous session when it hit more than a two-week high.
Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys inched down 1.0 basis point to 1.785 percent and the return on the benchmark five-year government bonds slipped 2.1 basis points to 1.871 percent. (Yonhap)
