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KOSPI falls on BOK's inflation warnings

Wed Jun 11, 2008 11:34pm EDT

Stocks

   

SEOUL, June 12 (Reuters) - Seoul shares fell 2 percent after the central bank warned of accelerating inflation on Thursday following a rate freeze decision, dampening sentiment.

The head of the Bank of Korea however said its warnings on inflation were not meant to indicate higher chances of an imminent interest rate increase.

Losses were led by technology shares such as Hynix Semiconductor (000660.KS), which fell 5.78 percent to 29,350 won after the Semiconductor Industry Association on Wednesday cut its forecast for global semiconductor sales growth.

Financials also fell across the board led by the Industrial Bank of Korea (024110.KS), which dropped 4.46 percent to 16,050 won on caution about a possible delay in government plans to sell shares in state-run financial institutions.

The Korea Composite Stock Price Index was down 1.99 percent to 1,746.17 points as of 0323 GMT, extending its losses after opening down 1.45 percent.

(Reporting by Park Jung-youn; editing by Jonathan Hopfner)



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