Seoul shares take breather after Fed minutes; steelmakers lose

Wed Feb 20, 2013 9:20pm EST

Related Topics

* KOSPI inches down after Fed minutes show policy divide

* Steelmakers lose ground on Fed concerns, hedge fund talk

* Automakers hold up, extending again as won eases

SEOUL, Feb 21 (Reuters) - Seoul shares were poised to snap a 6-day gain on Thursday, with steelmakers leading losses after minutes from the U.S. Federal Reserve's latest meeting prompted worries about the sustainability of its stimulus policy.

The Korea Composite Stock Price Index (KOSPI) fell 0.4 percent to 2,017.32 points as of 0202 GMT.

Foreign investors, who bought the most KOSPI stocks in five months over the previous session, continued their buying streak, supporting the market.

"The KOSPI will remain at around the 2,000-point level, as its global peers are going through a technical pullback from recent rallies," said Oh Hyun-seok, an analyst at Samsung Securities.

U.S. stocks lost ground overnight after minutes from the Fed's January meeting showed many officials worrying over the potential cost of more asset purchases, suggesting that the central bank may slow down its buying or even stop, sooner than expected.

"It is not that the Fed decided to end its 'quantitative easing', but that there was a debate over the policy. But this served as an excuse for U.S. investors to take profits after recent Wall Street rallies," said Cho Byeong-hyun, an analyst at Tong Yang Securities.

Steelmakers lost ground, taking cues from commodities which tumbled on worries that the U.S. economic stimulus may soon dry up and amid speculation a hedge fund had been forced to liquidate positions on commodities.

POSCO, South Korea's top steel producer, lost 2.3 percent, while second-ranked Hyundai Steel fell 2.3 percent.

Automakers extended gains, as the South Korean won fell a day after South Korea's president-elect pledged to take "pre-emptive" steps to stabilise the rising currency, which has dimmed prospects of exporters.

Hyundai Motor went up 0.5 percent, while Kia Motors gained 1.5 percent.

Technology firms were mixed, with Samsung Electronics rising 0.8 percent and LG Display dropping 0.7 percent.

Among smaller stocks, Hyundai Elevator tumbled 5.7 percent to 87,500 Korean won ($81.14) after the unit of Hyundai Group announced a plan to issue new stocks at 69,300 won per share, a 25 percent discount to Wednesday's closing price.

Kumho Investment Bank spiked by the daily limit of 15 percent, after Daewoo Securities said it was considering participating in the bidding for Kumho Investment Bank. ($1 = 1078.3500 Korean won) (Reporting by Hyunjoo Jin; Editing by Jacqueline Wong)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.