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South Korean shares fall on worries over U.S. fiscal cliff
November 8, 2012 / 7:52 AM / 5 years ago

South Korean shares fall on worries over U.S. fiscal cliff

* Blue-chips mostly down on local institutional selling

* NCsoft falls 13 pct on weak earnings forecasts

* Healthcare shares up on bullish outlook from Obama win

By Joyce Lee

SEOUL, Nov 8 (Reuters) - South Korean shares snapped a two-day winning streak on Thursday as investors, worried about a looming fiscal crisis in the United States, lowered their appetite for risk.

U.S. President Barack Obama, who won a second term in office, faces a showdown over a so-called “fiscal cliff” of spending cuts and tax increases, with a divided Congress able to block his every move.

The Korea Composite Stock Price Index (KOPS) fell 1.19 percent at 1,914.41 points.

“The market is expected to trace last night’s Wall Street losses and close around the 1,910-point level,” Lee Sun-yup, an analyst at Shinhan Investment Corp, said.

Shares of builder GS Engineering & Construction tumbled 11.2 percent on weak third-quarter earnings while online game developer NCsoft Corp plunged 12.9 percent on a poor earnings forecast.

The re-election of Obama, however, helped drive pharmaceuticals and makers of medical equipment higher on hopes of support for the sector. Schnell Biopharmaceuticals Inc , Daewon Pharmaceutical Co and Wooridul Pharmaceutical Ltd all gained over 14 percent.

“Investor sentiment has picked up for the local healthcare sector upon Obama’s re-election, as the administration is expected to expand the use of generic drugs through deregulation and state support,” said Kim Ki-bae, an analyst at Samsung Securities.

Declining shares swamped winners 534 to 270.

The KOSPI 200 benchmark of core stocks was down 1.4 percent, while the junior KOSDAQ edged 0.1 percent higher.

South Korea’s stock market closed one hour later than usual, at 4 p.m. (0700 GMT) to make up for a delayed start due to national college entrance examinations. (Additional reporting by Hyunjoo Jin; Editing by Sanjeev Miglani)

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