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Shares down 0.54% on hawkish Fed statement

Jan. 29, 2015 - 21:34 By Korea Herald
South Korean stocks ended 0.54 percent lower on Thursday as the U.S. Federal Reserve‘s latest statement surprised investors and prompted a foreign sell-off here, analysts said. The local currency sharply fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index slid 10.56 points to 1,951.02. Trading volume was moderate at 381.7 million shares worth 5.2 trillion won ($4.8 billion), with decliners slightly outnumbering gainers 398 to 391.

“The Fed statement was more hawkish than expected. It seems that U.S. funds are selling, with Middle East funds also joining the move amid sliding oil prices,” said Kim Ji-hyung, an analyst at Hanyang Securities. “It seems that the KOSPI will be stuck in the 1,930-1950 box until Greek uncertainties ease.”

After a two-day policy meeting, the Fed voiced an upbeat outlook on the U.S. economy, raising views it is on track to hike rates later in the year.

Major tech shares ended in negative terrain. Samsung Electronics fell 1.31 percent to 1,360,000 won after reporting a 27 percent fall in its fourth-quarter earnings.

Profit from the mobile business, the company’s cash cow, plunged 64 percent to 1.96 trillion won in the fourth quarter, from 5.47 trillion won a year earlier.

Naver, the country‘s top Internet portal operator, slumped 5.28 percent to 736,000 won as its fourth-quarter earnings failed to meet expectations.

Chip giant SK hynix also shed 3.66 percent to 47,400 won despite posting a record annual profit for a second consecutive year.

Autos and financials, in contrast, bucked the decline. Hyundai Motor, the country’s top carmaker, added 0.91 percent to 167,000 won and its sister firm Kia Motors advanced 1.41 percent to 46,650 won.

Banking giant Shinhan Financial rose 1.67 percent to 45,600 won ahead of its fourth-quarter earnings release scheduled for Feb. 6.

The local currency ended at 1,093.9 won against the U.S. dollar, down 9.4 won from Wednesday‘s close. (Yonhap)