June 13, 2014 / 3:10 AM / 4 years ago

S.Korea stocks drop on Iraq, foreigners set to snap 21-day buying streak

* Foreigners on track to snap 21-day net buying streak
    * KOSPI headed for weekly losses
    * Won tracks weaker local stock market, but up for week

    SEOUL, June 13 (Reuters) - South Korean shares fell 1
percent on Friday morning and foreigners look poised to snap a
21-day net buying streak after  President Barack Obama said he
would not rule out U.S. action to counter an insurgency in Iraq.
    Foreign investors sold a net 116 billion won ($114 million)
worth of KOSPI shares by mid-morning, after purchasing a net 3.5
trillion won worth over the last 21 consecutive sessions.
    "In the absence of internal risk momentum, the market has
been driven by offshore investors, who are responding with
jitters to the heightened Wall Street volatility on the Iraq
scare," said Hyundai Securities market analyst Bae Sung-young.
    The Korea Composite Stock Price Index (KOSPI) was
down 21.57 points at 1,989.77 points as of 0225 GMT. It fell at
one point to a one-month low of 1,986.40.
    A 1 percent slide would be its biggest one day percentage
drop since a 1.3 percent fall on April 25. For the week, the
index is down 0.3 percent.
    Sunni Islamist militants, who took over Iraq's
second-biggest city Mosul earlier this week, extended their
advance south toward Baghdad and surrounded the country's
largest refinery in the northern town of Baiji on
Thursday. 
    Samsung Electronics Co Ltd, the stock most
picked by foreigners during their buying spree, fell 2.5
percent. 
    "In order for the market to gain traction, Chinese markets
need to show resilience. If data due late in the session is
upbeat, it could be the first step towards that," Bae added.
    Chinese May data including industrial output, retail sales
and urban investment is due to be released at 0530 GMT.
 
    In the foreign exchange market, the won eased
modestly. 
    "It appears dollar-long plays are gaining strength as
offshore investors dump local stocks," a currency dealer at a
local bank said.  
    The local currency was quoted at 1,018.2 versus
the dollar as of 0225 GMT, down 0.1 percent from Thursday's
onshore close of 1,017.7. On a weekly basis, the won is up 0.2
percent.
                       0225 GMT    Prev close
 Dollar/won            1,018.2       1,017.7
 Yen/won        10.0039/9.9971       10.0020
 *KTB futures           106.27        106.21
 KOSPI                1,989.77      2,011.65
 * Front-month futures on three-year treasury bonds
($1 = 1017.9000 South Korean Won)

 (Reporting by Jungmin Jang; Additional reporting by Yena Park;
Editing by Edwina Gibbs)

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