South Korean stocks sank 1.15 percent Tuesday as investors were disheartened by market heavyweights' sluggish earnings and slumping oil prices. The local currency weakened against the U.S. dollar.
(Yonhap)
The benchmark Korea Composite Stock Price Index (KOSPI) shed 21.74 points to end at 1,871.69. Trade volume was slim at 295.26 million shares worth 4.4 trillion won (US$3.65 billion), with losers beating winners 559 to 264.
Weak quarterly profits from major Korean companies dragged down the equity market, while a slowdown in Asia's fourth-largest economy showed no signs of letting up.
South Korea's fourth-quarter economic growth more than halved from three months earlier due to plunging construction investments.
Crude oil prices also dampened investments as they fell below $30 a barrel Monday after Iraq's increased output last month deepened concerns over a supply glut.
"Investors sentiment cooled as oil prices plunged and fourth-quarter earnings were in the doldrums," Ahn Hyunk-kook, a researcher at Shinhan Investment & Securities, said. "Foreigners and institutions were reluctant to make investments before U.S. Federal Reserve's policy statement due on Wednesday."
Market heavyweights traded bearish across the board.
Market kingpin Samsung Electronics declined 2.15 percent to 1,137,000 won, and SK hynix, the world's second-largest chip maker,edged down 0.54 percent to 27,850 won after posting sluggish fourth-quarter earnings before the market opening.
Hyundai Motor declined 1.09 percent to 136,000 won after the nation's top automaker said its fourth-quarter net profits slipped due to the strong local currency. Its smaller affiliate, Kia Motors, decreased 2.08 percent to 47,100 won.
Chemical shares suffered on an unfavorable outlook for their battery business after the Chinese government said Saturday that it will gradually phase out subsidies for green energy vehicles in the next five years.
Samsung SDI, a battery-making unit of Samsung Group, tumbled 14.73 percent to 87,400 won one day after posting a net loss in the fourth quarter.
LG Chem, the nation's largest chemical and battery maker, sank 7.78 percent to 278,500 won on worries over its quarterly report slated for later in the day.
The local currency ended at 1,204.2 won against the greenback, down 10 won from Monday's close.
Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys shed 2.2 basis points to 1.599 percent while the return on the benchmark five-year government bonds lost 2.4 basis points to 1.734 percent. (Yonhap)
