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Seoul shares set for 2nd day of decline after Fed minutes back tapering
February 20, 2014 / 2:30 AM / 4 years ago

Seoul shares set for 2nd day of decline after Fed minutes back tapering

* Fed minutes reflect confidence in U.S. economic recovery

* Naver Corp stocks plummet on Facebook’s acquisition of WhatsApp

* Seoul stocks edge down to 1-week low

By Christine Kim

SEOUL, Feb 20 (Reuters) - Seoul shares fell for a second session early on Thursday, sagging after minutes from the U.S. Federal Reserve’s January meeting showed the central bank was sticking to its plan to keep trimming stimulus.

The Korea Composite Stock Price Index (KOSPI) was down 0.4 percent at 1,934.93 points as of 0200 GMT. It edged down to 1,931.51 points to mark a one-week low.

“Local stocks have been moving listlessly, with no single sector standing out to lead trade,” said Chun Jung-hoon, an analyst at Kiwoom Securities in Seoul.

“The KOSPI is likely to continue this tepid movement while seeing capped gains...we will probably see some clear direction in the market in March or April once (U.S. economic indicators) are clear of seasonal influences.”

The Fed minutes showed late on Wednesday members of the Fed’s policy setting committee stressed their commitment to steadily dial down its bond-buying programme.

It reflected the Fed’s confidence in growth, despite recent weak economic indicators that some analysts have attributed to unusually cold weather in the United States.

Foreign investors were net sellers of 122.6 billion won ($115.06 million) worth of KOSPI shares near mid-session, which weighed on the index.

Decliners outnumbered advancers 424 to 347.

Services dragged the main bourse down, with Naver Corp leading the decline, down 6.0 percent, on news Facebook will acquire mobile-messaging start-up WhatsApp for $19 billion.

Naver Corp’s chat service LINE was seen as threatened by the acquisition, analysts said, prompting investors to dump the stock.

“The size of Facebook’s acquisition of Whatsapp came as a surprise, applying pressure to its global competitors including LINE,” IM Investment & Securities analyst Lee Jong-won said.

“However, the stock will rebound as the target market and income platforms differ between Whatsapp and LINE.”

Meanwhile, the construction sector outperformed the bourse after the Ministry of Land, Infrastructure and Transport said in a report to parliament on Wednesday it would ease restrictions on the housing sector.

Daewoo Engineering & Construction led the sector’s gains, jumping 6.4 percent.

The KOSPI 200 benchmark of core stocks was down 0.6 percent, while the junior KOSDAQ edged 0.4 percent lower.

$1 = 1065.5500 Korean won Additional reporting by Jungmin Jang; Editing by Jacqueline Wong

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