June 15, 2017 / 2:54 AM / a month ago

S.Korea stocks down on Fed hike, comments on cutting bond portfolio

3 Min Read

    * Local institutions seem worried, selling large amount of
KOSPI
    * KOSPI to continue upward trend -analyst
    * Won erases gains as dlr rebounds

    SEOUL, June 15 (Reuters) - South Korean shares slid to a
one-week low early on Thursday as the U.S. Federal Reserve
raised interest rates and said it would reduce its holdings in
bonds and other securities, signalling a more positive outlook
on the U.S. economy.             
    The Korea Composite Stock Price Index (KOSPI)         was
down 0.8 percent at 2,354.78 points as of 0234 GMT, its weakest
level since June 8. 
    "The Fed also forecasted one more rate hike within this year
and seemed very confident about U.S. economic growth in the
second-half. Such hawkish stance seems to be causing jitters,
among local institutions especially," said Cho Byung-hyun, a
stock analyst at Yuanta Securities.
    Domestic institutions have sold a net 213.8 billion won
($190.32 million) worth of KOSPI shares near mid-session,
putting pressure on the index.
    Cho, however, said the current adjustment is just a
technical one and will not hurt the KOSPI's upward trend.
    "Strong signs of global economic recovery will boost
investors' sentiment, pushing the KOSPI up in the end. The
market should notice that foreign investors are not selling off
the local equities today," added Cho.
    Offshore investors were set to be net buyers though the
amount was small, by about 4.2 billion won.
    Posco             lost 2.5 percent and Hyundai Motor
            was down 3.3 percent.
    Decliners outnumbered advancers 610 to 189.
    The South Korean won        gave up its gains after touching
a one-week high as the dollar bounced back up on the Fed's
policy decision.
    The won            was steady at 1,123.8 to the dollar
compared with Wednesday's close of 1,123.9.
    June futures on three-year treasury bonds         gained
0.06 point to 109.62. 
    
                       0234 GMT    Prev close
 Dollar/won             1,123.8       1,123.9
 Yen/won             10.2537/74       10.2101
 *KTB futures            109.62        109.56
 KOSPI                 2,354.78      2,372.64
 * Front-month futures on three-year treasury bonds
    

 (Reporting by Dahee Kim; Editing by Sunil Nair)
  

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