Seoul shares hit 3-week-low as weaker yen, North Korea weigh
* Rebound in auto shares seen as temporary; analysts say
* Foreign investors extend selling for fourth consecutive day
By Hyunjoo Jin
SEOUL, March 12 (Reuters) - Seoul shares extended losses to a three-week-low on Tuesday, as hopes of a U.S. economic recovery were overshadowed by concerns about the weaker Japanese yen and tensions on the Korean Peninsula.
The Korea Composite Stock Price Index (KOSPI) finished down 0.5 percent at 1,993.34 points, its lowest closing level since Feb. 19, with foreigners extending their selling streak for a fourth consecutive session.
"The yen is the biggest problem for the KOSPI, which is reflecting the possibility that the dollar will rise as high as 100 yen," said Lee Jae-hoon, an analyst at Mirae Asset Securities.
The yen carved out a fresh 3-1/2 year low versus the greenback on Tuesday following a media report that the Bank of Japan might deliver bold stimulus sooner than expected.
A weaker yen bolsters the price competitiveness of Japanese exporters which compete head to head with South Korean rivals.
"The U.S. economy is improving, but I am not that optimistic about the KOSPI, which will be weighed down by North Korean issues and currency moves," said Cho Young-hyun, an analyst at Hana Daetoo Securities.
North Korea has torn up the armistice that ended the Korean War in 1953 and shut down a humanitarian hotline with the South, heightening geopolitical tensions.
Samsung Electronics, South Korea's most valuable stock which accounts for nearly a fifth of the KOSPI's market capitalisation, ended down 0.9 percent, leading the tech sector's losses.
Despite the weakness in the yen, automakers bucked the trend and rebounded from recent losses, with Hyundai Motor rising 1 percent and Kia Motors inching up 0.4 percent.
However, analysts said they expected the rebound to be temporary as prolonged weakness in the yen begins to help Japanese automakers in overseas markets by making their products cheaper than the South Korean rivals.
"Auto shares are having a technical rebound today. Apart from the yen's weakness, automakers have little momentum in the first half of this year because of a lack of new models, the start of a new production shift system, and falling U.S. market shares," said PJ Yoon, an auto analyst at Samsung Securities.
Move on day -0.5 percent
12-month high 2,057.28 14 March 2012
12-month low 1,769.31 25 July 2012
Change on yr -0.19 percent
All-time high 2,231.47 27 April 2011
All-time low 93.10 6 January 1981 (Reporting by Hyunjoo Jin; Editing by Sanjeev Miglani)
- Tweet this
- Share this
- Digg this
- Malaysia military tracked missing plane to west coast - source |
- Malaysia air probe finds scant evidence of attack - sources |
- High-profile British rail union leader Bob Crow dies
- Insight - Scotland's Salmond talks independence, but plays politics
- Ukraine forms new defence force, seeks Western help |