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Seoul shares fall on China PMI, won retreats as dollar rallies
August 21, 2014 / 2:55 AM / 3 years ago

Seoul shares fall on China PMI, won retreats as dollar rallies

* KOSPI weighed by disappointing China data, hawkish tone
from Fed
    * Won edges down as dollar trades at 11-mth high

    SEOUL, Aug 21 (Reuters) - South Korean shares fell on
Thursday morning as concerns of a slowdown in China's
manufacturing sector and the U.S Federal Reserve's discussion of
an accelerated timetable for a future rate hike kept investors
cautious.
      Minutes from the latest Fed meeting released on Wednesday
hinted that a better-than-expected recovery in the U.S labor
market could prompt policymakers to raise interest rates sooner
rather than later. 
    Investor sentiment took a further hit after a preliminary
survey on China's manufacturing sector fell short of
expectations and indicated sluggish growth in
August. 
    The Korea Composite Stock Price Index (KOSPI) was
down 1.18 percent at 2,048.41 points as of 0210 GMT. 
    "In the absence of any positive fundamental indicators to
lend support, the market is going through a correction phase
with institutions and foreign investors leading the selloff,"
said Kim Yoon-seo, an analyst at KTB Investment & Securities.
    Institutions and foreigners sold a net 122 billion won ($119
million) and 43.4 billion won ($42.4 million) worth of shares on
the main bourse respectively. 
    Shares in state-controlled utility Korea Electric Power Corp
, the sixth largest listing on the benchmark KOSPI by
market capitalization, tumbled more than 4 percent after its CEO
said that it is considering the sale of all the KEPCO shares
held by its treasury to reduce debt.
    A KEPCO spokesman confirmed that the sale is under
consideration but the specifics such as timing or scale of a
potential deal are yet to be determined.
    KEPCO held around 18.9 million shares as of end-June, worth
a total of around 814 billion won at the end of Wednesday's
session.
    YG Entertainment, one of South Korea's largest
K-pop record labels and talent agency whose clients include the
rapper Psy, saw its shares jump more than 12 percent after
saying it was receiving an $80 million investment from the
private equity arm of French luxury-goods maker LVMH 
    The South Korean won ticked lower on Thursday, as the
dollar extended its rally to hit an 11-month high against a
basket of currencies in light of hawkish undertones detected in
the latest Fed meeting.
    The local currency was quoted at 1,023.4 to the
dollar as of 0210 GMT.
    Heading into the weekend, investors will be looking for more
 clues as Fed Chair Janet Yellen speaks at the annual meeting of
central bank chiefs in Jackson Hole, Wyoming.
    September futures on three-year treasury bonds fell
0.01 points to 106.78. 
    
                       0210 GMT    Prev close
 Dollar/won             1,023.4       1,022.7
 Yen/won             9.8412/488        9.8535
 *KTB futures            106.78        106.79
 KOSPI                 2,048.41      2,072.78
 * Front-month futures on three-year treasury bonds

 (Reporting by Joonhee Yu; Editing by Eric Meijer)

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