Korean stocks closed 0.78 percent lower Tuesday, as renewed worries over a global economic downturn prompted by China’s cut in its growth target kept investors at bay, analysts said. The local currency lost ground against the U.S. dollar.
After opening 0.16 percent higher, the benchmark Korea Composite Stock Price Index soon reverted to lose 15.70 points to close at 2,000.36. Trading volume was moderate at 544.9 million shares worth 5.22 trillion won ($4.64 billion) with decliners far outpacing gainers 637 to 198.
“China’s weaker growth prediction dealt a blow, spurring foreigners to shift to a selling stance at a time when they’re already fatigued by the nagging eurozone bailout plans to solve Greek debts,” said Lim Soo-gyun, an analyst from Samsung Securities Co.
Greece is trapped in an agreement yet to have been signed off by private creditors to proceed with the debt settlement plan initiated by the European major powers, including Germany.
Nevertheless, such a downward trend in the KOSPI should only last for the short term because a fresh inflow of liquidity is expected as European central banks last week released a new rescue package of 54 billion euros, he added.
“The concern at this moment hangs more on how China will handle its stimulus to boost its economy because that can have an immediate impact on the real economy here,” said Lim.
Most shares lost ground with steelmakers, which heavily rely on Chinese demand, pulling down the key index. Industry leader POSCO retreated 3.08 percent to 409,000 won and Hyundai Steel lost 1.79 percent to 110,000 won.
Machineries and heavy industries finished bearish, with leading construction maker Doosan Infracore tumbling 4.63 percent to 22,650 won and the world’s biggest shipyard Hyundai Heavy Industries slumping 3.10 percent to 328,500 won.
In contrast, tech issues rose on the back of their resilient outlooks for this year. Market behemoth Samsung Electronics edged up 0.51 percent to 1,180,000 won and its smaller rival LG Electronics rose 0.47 percent to 85,000 won.
The local currency ended at 1,122.90 won against the greenback, down 4.4 won from Monday’s close, as foreigners scurried to reduce their holdings of local equities, dealers said.
