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S.Korea shares ease as Fed-inspired upward momentum slows
September 17, 2012 / 7:33 AM / 5 years ago

S.Korea shares ease as Fed-inspired upward momentum slows

SEOUL, Sept 17 (Reuters) - South Korean shares fell on
Monday but remained above the 2,000 point level, as momentum
from Friday's Fed-inspired rally slowed without a basic
improvement in fundamentals. 
    The Korea Composite Stock Price Index (KOSPI) closed
down 0.3 percent at 2,002.35 points, after hitting a five-month
high on Friday in reaction to the U.S. Federal Reserve's
announcement of a third round of quantitative easing.
 
    "With foreign investors' risk appetites unabated, the wider
bullish trend appears to be intact," said Lim Dong-rak, an
analyst at Hanyang Securities. 
    "However, it takes time for fundamentals to improve, and the
index could not help but take a breather from rapid gains around
the 2,000-point barrier." 
    South Korea's influential government think tank slashed on
Monday its 2012 and 2013 economic growth forecasts, calling for
more expansionary policy to counter the impact from the
protracted euro zone crisis. 
    Asia's fourth-largest economy is now seen growing just 2.5
percent this year after a 3.6 percent rise last year, the Korea
Development Institute (KDI) said in a report, a sharp cut from
3.6 percent growth forecast in May. 
    Still, foreign investors bought a net 503 billion won ($450
million) worth of shares on the KOSPI, while local institutional
and retail investors sought profits by selling a combined net
499 billion won worth of shares.
    Market heavyweight Samsung Electronics snapped a
four-day winning streak and closed down 1.6 percent due to
profit-taking, analysts said. 
    Local banking stocks remained bullish, with Shinhan
Financial Group up 3.2 percent while Hana Financial
Group rose 3 percent. 
    "Improvement of banks' funding conditions has much to do
with the bullish investor sentiment, as the won is expected to
appreciate while risk premiums shrink," said Kim Soo-hyun, a
banking sector analyst at Shinhan Investment Corp.
    Meanwhile, South Korean general insurance stocks fell across
the board, with reports of property damage caused by Typhoon
Sanba hitting the Korean peninsula. 
    Hyundai Marine & Fire Insurance closed down 3.4
percent, while Samsung Fire & Marine Insurance fell
3.5 percent. 
    Telecom shares also declined, with SK Telecom 
closing down 3.3 percent while KT Corp fell 2.3
percent. 
    Analysts said institutional investors continued to shed
telecom stocks since Friday's session as dimmer earnings
forecasts coincided with roughly three months of strong stock
performance.
    Gainers outnumbered decliners 458 to 359. 
    The KOSPI 200 benchmark of core stocks closed down
0.4 percent, while the junior KOSDAQ edged 0.03 percent
lower.
          Move on day                -0.26 percent  
          12-month high   2,057.28   14 March 2012   
          12-month low    1,644.11   26 Sept 2011               
          Change on yr               +9.63 percent              
          All-time high   2,231.47   27 April 2011  
          All-time low       93.10   6 January 1981

    ($1 = 1117.0500 Korean won)

 (Reporting By Joyce Lee; Editing by Kim Coghill)
 (jungyoon.lee@thomsonreuters.com; +82 2 3704 5609; Reuters
Messaging: jungyoon.lee.thomsonreuters.com@reuters.net)

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