Seoul stocks end down 0.98 pct on cloudy recovery outlook

SEOUL, May 21 (Yonhap) -- South Korean shares closed 0.98 percent higher Thursday
as bleak outlooks for a quick economic recovery set off selling in shipping, tech
and other large-cap issues, analysts said. The local currency inched up against
the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 14.05 points to
1,421.65. Volume was heavy at 858.71 million shares worth 7.78 trillion won
(US$6.2 billion), with losers outpacing gainers 536 to 293.
"Affected by overnight setbacks in the U.S., local shares started lower and the
losses were extended as investors dumped shares amid dimming economic outlooks,"
said Han Chi-hwan, an analyst at Daewoo Securities.
On Wednesday, the U.S. Federal Reserve trimmed the nation's 2009 growth outlook,
forecasting the economy could shrink between 1.3 and 2 percent compared to a
prior estimate of a 0.5 and 1.3 percent contraction. It also painted a bleaker
picture for labor markets, saying that unemployment will approach 10 percent.
The downbeat projections caused investor sentiment to go sour here as it bodes
ill for the local economy which depends heavily on exports. The Dow Jones
industrial average fell 0.62 percent and the Nasdaq composite index shed 0.39
percent.
Most shares closed sharply lower, with shipping and tech exporters driving the
downswings.
Hanjin Shipping, the No. 1 shipper by sales, plunged 7.06 percent to 19,750 won
as a protracted economic slowdown results in decreased demand. Smaller shipper
Korea Line fell 5.99 percent to 73,700 won.
Chipmakers also lost significant ground. Industry leader Samsung Electronics
dropped 2.26 percent to 563,000 won, while second-ranked Hynix Semiconductor
dived 7.24 percent to 13,450 won.
Financial shares, however, bucked the overall market downturn. Top brokerage
Samsung Securities jumped 2.73 percent to 71,500 won amid optimism the brokerage
industry will benefit from index gains in the second half. Smaller HMC Investment
Securities surged 5.14 percent to 35,800 won.
The local currency ended at 1,248.6 won against the dollar, up 2.4 won from
Wednesday's close, as offshore investors dumped the greenback, dealers said.
kokobj@yna.co.kr
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