* Yellen interest rate comments leave market wary
* Foreign investors offload local stocks
SEOUL, March 20 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
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
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
($1 = 1070.4500 Korean Won)
(Reporting by Jungmin Jang; Editing by Eric Meijer)