Seoul shares end 2.6 pct lower on economy woes

(ATTN: ADDS bond yields at bottom)
By Kim Soo-yeon
SEOUL, June 4 (Yonhap) -- South Korean stocks closed 2.6 percent lower Thursday
as foreign and institutional investors dumped local stocks amid lingering woes
over a global economic recovery, analyst said. The local currency fell against
the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) declined 36.75 points to
1,378.14. Volume was moderate at 571.5 million shares worth 6.77 trillion won
(US$5.41 billion), with losers outpacing gainers 669 to 168.
"Foreign investors' selling spree pulled the index down. Worse-than-expected data
on U.S. job markets hurt investor sentiment," said Lee Seung-woo, an analyst at
Daewoo Securities Co. "But it is too early to say that they will return to a
selling mode as their appetite for riskier assets seems to linger."
The KOSPI, which started weaker on Wall Street falls, extended earlier losses in
late trading, shedding as much as 2.75 percent at one point. Foreign investors
dumped a net 158.8 billion won worth of local stocks on the main bourse, becoming
net sellers for the second straight session.
Losses of financial and construction shares led the broader market's fall. KB
Financial Group, which controls top lender Kookmin Bank, shed 4.84 percent to
40,300 won and its smaller rival Hana Financial Group tumbled 7.28 percent to
26,100 won.
Leading builder Daewoo Engineering & Construction Co. plunged 10.34 percent to
11,700 won following its recent sharp gain stemming from a possible sale.
Shipbuilders also lost ground with industry leader Hyundai Heavy Industries
losing 4.88 percent to 214,500 won.
But the Korean currency's weakness helped boost exporters, including tech and
automaker shares. Market leader Samsung Electronics advanced 0.54 percent to
555,000 won and top carmaker Hyundai Motor gained 1.82 percent to 72,900 won.
The local currency ended at 1,251 won against the greenback, down 17.8 won from
Wednesday's close, as foreign investors cut their holdings of Seoul stocks,
dealers said.
Bond prices, which move inversely to yields, closed higher. The return on
three-year Treasuries shed 0.03 percentage point to 3.88 percent, and the
benchmark yield on five-year government bonds declined 0.02 percentage point to
4.6 percent.
sooyeon@yna.co.kr
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