South Korean stocks ended 0.06 percent lower Tuesday as investors took a wait-and-see stance ahead of the MSCI’s decision on whether to include Chinese stocks in its emerging market index, a move that could spark outflows of money from here, analysts said. The local currency gained ground against the U.S. dollar.
The benchmark Korea Composite Stock Price Index fell 1.16 points to 2,064.03. Trading volume was moderate at 417.64 million shares worth 5.54 trillion won ($4.95 billion), with gainers beating decliners 523 to 297.
“The market was volatile in early trading but moved in a narrow range mostly throughout the day, with some large-cap shares, including Samsung Electronics, falling ahead of the MSCI’s decision to be announced early tomorrow morning,” said Bae Sung-young, an analyst at Hyundai Securities.
Global index provider MSCI will announce whether to include part of mainland Chinese shares in its emerging market index. Experts noted that the inclusion may lead to some foreign capital outflows from the Korean market to China.
Market bellwether Samsung Electronics weighed on the market by losing 2.44 percent to 1,282,000 won. Flat-panel maker LG Display fell 2.25 percent to 28,200 won.
Major financial shares also ended in negative terrain with No. 1 insurer Samsung Fire & Marine Insurance dropping 2.8 percent to 104,000 won.
Telecom issues, however, closed higher with mobile carrier SK Telecom jumping 2.86 percent to 251,500 won.
Builders apparently benefited from growing expectations that the central bank could lower its key interest rate during a meeting scheduled on Thursday.
Hyundai Engineering & Construction rose 2.76 percent to 63,200 won and Daewoo Engineering & Construction gained 1.13 percent to 7,130 won.
The Bank of Korea is widely expected to lower the nation’s key interest rate to a record low of 1.5 percent in June to cope with the country’s slumping exports and a slump in domestic demand following an outbreak of Middle East Respiratory Syndrome in the country.
Samsung C&T, the trading and construction arm of Samsung Group, lost 3.55 percent amid controversy over its envisioned merger with Cheil Industries after a U.S. hedge fund has taken legal action to block the move.
The South Korean currency ended at 1,118.9 won against the greenback, up 4.4 won from Monday’s close.
Bond prices, which move inversely to yields, ended mixed. The yield on three-year Treasurys moved up 0.4 basis point to 1.733 percent, and the return on the benchmark five-year government bonds went down 2.9 basis points to 1.995 percent. (Yonhap)
