South Korean stocks ended 1 percent lower Monday as investor sentiment was sapped by growing prospects of a rate hike in the United States, analysts said. The South Korean won lost ground against the greenback.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 20.12 points to 1,992.82, falling behind the 2,000-mark it had reached during the previous trading session. Trading volume was low at 288.78 million shares worth 3.93 trillion won (US$3.54 billion), with decliners outpacing gainers 540 to 267.
Analysts said the fall came amid concerns that the U.S. Federal Reserve may raise the key interest rate sooner than later.
"With the better-than-expected jobs data released on Friday, there are growing speculations that the Fed may raise the interest rate earlier than was previously anticipated," said Kang Hyun-gie, an analyst at I'M Investment & Securities Co.
Data released by the U.S. Labor Department showed that the world's No. 1 economy had added 295,000 jobs last month, beating a forecast of 240,000, and fanned outlooks that the Fed will accelerate its rate hike.
"Investors may be worried, considering that there have been past instances of a stock market plunge in South Korea following a rate hike in the United States," Kang added.
Foreigners sold a net 67.27 billion won, and retail investors scooped up 230.78 billion won. Institutions sold more shares than they bought at 176.75 billion won.
Tech shares led the market's decline, with leading Samsung Electronics falling 1.53 percent to 1,420,000 won and top chipmaker SK hynix tumbling 2.38 percent to 45,100 won.
LG Electronics shed 0.5 percent to 60,100 won. SK Telecom, the country's top mobile carrier, surrendered 1.41 percent to 279,000 won, and No. 3 LG Uplus also slid 0.43 percent to 11,500 won. KT dropped 0.81 percent to 30,450 won.
Carmakers closed mixed, with No. 1 Hyundai Motor stepping down 2.31 percent to 169,000 won while auto parts maker Hyundai Mobis remained unchanged at 257,000 won. Kia Motors slipped 0.52 percent to finish at 47,750 won.
Builders also moved in different directions, with Daewoo Engineering & Construction losing 1.65 percent to 7,760 won and Hyundai Engineering & Construction backtracking 0.38 percent to end at 52,700 won. Kumho Industrial, whose majority stake is currently up for sale with five contenders awaiting evaluation, ended higher, advancing 0.67 percent to 52,700 won.
The local currency fell to the lowest level in one month, ending at 1,112.10 won against the U.S. dollar, down 13.40 won from Friday's close.
Bond prices, which move inversely to yields, ended mixed. The yield on three-year Treasurys fell 1.9 basis point to 1.924 percent, while the return on the benchmark five-year government bonds moved up 2 basis points to 2.057 percent. (Yonhap)
