Seoul shares slip on Fed rate outlook, persistent foreign selling
* Yellen interest rate comments leave market wary
* Foreign investors offload local stocks
SEOUL, March 20 (Reuters) - Seoul shares nudged lower on Thursday morning after U.S. Federal Reserve Chair Janet Yellen suggested a rate hike might be implemented earlier than expected, prompting offshore investors to unwind risk.
The Korea Composite Stock Price Index (Kospi) was down 0.7 percent at 1,924 points as of 0205 GMT after touching an intraday low of 1,920.79.
Yellen said on Wednesday the Fed will probably end its bond-buying program this coming fall, and could start raising interest rates around six months later, a more aggressive path than markets had anticipated.
"The market is reacting out of confusion, with the dovish Fed chair talking in a relatively hawkish tone on rate hikes, encouraging investors to take cautious positions," said Kim Yong-goo, an analyst at Samsung Securities.
Kim added that investors will pay extra attention to upcoming March U.S. economic indicators for clues to the Fed's next policy move, although they expect the Kospi's chart to be trapped in a box pattern below the 2,000 point level for the rest of the month if there is no major event.
Offshore investors offloaded a net 68.2 billion won ($63.7 million) worth of Kospi shares near mid-session, poised to be net sellers for a ninth consecutive session.
Solar energy stocks underperformed the broader market, with OCI Co Ltd and Hanwha Chemical falling 6.5 percent and 2.7 percent, respectively on concerns about a weakening economic outlook in China.
Foreigner-only casino operator Grand Korea Leisure Co Ltd , which jumped 6.8 percent in the previous session on South Korean expectations of gambling industry growth, dropped 2.9 percent as some investors consolidated gains.
Wednesday's sharp rise came after the South Korean government granted a consortium led by Caesars Entertainment Corp preliminary approval to build a new foreigners-only gaming resort.
While frowning on gambling for its own citizens who only have access to one remotely-located casino, South Korea is willing to make exceptions for overseas visitors in the interest of developing its tourism industry. It has 16 small foreigner-only casinos but as yet no big glitzy integrated resorts.
Market heavyweights struggled as well, with Hyundai Motor Co slipping 1.3 percent and Samsung Electronics Co Ltd edging down 0.4 percent.
Decliners outnumbered advancers 478 to 186.
The KOSPI 200 benchmark of core stocks was down 0.8 percent, while the tech-heavy junior KOSDAQ edged 0.5 percent lower. ($1 = 1070.4500 Korean Won) (Reporting by Jungmin Jang; Editing by Eric Meijer)
- 'Weird Al' Yankovic still trying to wrap head around No. 1 album
- World's oldest joke traced back to 1900 BC
- French warplanes search Mali desert for crashed Air Algerie plane |
- Crunch time for Gaza truce talks as death toll passes 800 |
- Wreckage of Air Algerie plane carrying 116 people found in Mali |