Seoul, May 7 (Xinhua-ANI): South Korean shares retreated for three straight sessions on Monday as foreign investors sold local stocks following the weaker-than-expected results of the U.S. employment data, analysts said.
The benchmark Korea Composite Stock Price Index (KOSPI) declined 32.71 points, or 1.64 percent, to close at 1,956.44, the lowest since Jan. 31. Trading volume stood at 528.56 million shares worth 4.7 trillion won (4.13 billion U.S. dollars).
The KOSPI was mired in negative territory throughout the session after foreigners were disappointed at the highly anticipated monthly jobs report in the U.S.. The world's largest economy only added 115,000 new jobs in April, much less than the market expectation of 170,000.
The U.S. unemployment rate fell to 8.1 percent, lower than the median estimates of 8.2 percent, but the improvement was mainly due to 342,000 people who dropped out of the labor force and was no longer counted in the number.
Adding to concerns, a Socialist candidate who was against the austerity plan won the French presidential election, beating the current president Nicolas Sarkozy. The Socialist candidate's victory boosted worries that the new fiscal pact in Europe may be renegotiated in favor of economic growth rather than fiscal tightening. "Investors'sentiment was impaired by the weaker-than- expected jobs data in the U.S. The results in the French presidential election boosted concerns over political uncertainties in Europe," Kang Hyun-gie, a strategist at Solomon Investment and Securities in Seoul, told Xinhua.
Kang noted that the local stock market will likely try to find its bottom for the time being as China, the world's No.2 economy, was expected to fail to fill the cap stemming from the global economic slowdown, saying that the KOSPI was forecast to rebound from around the third quarter when the recovery in the European consumption will enhance exports of China.
Offshore investor led the market decline by dumping a net 470.5 billion won worth of local shares. The foreign selling was the largest since Nov. 10 last year when foreigners offloaded local stocks worth a whopping 504.8 billion won.
Program-linked transaction posted net selling worth 352.43 billion won, but retail investors limited the KOSPI's further fall by purchasing a net 455.5 billion won worth of shares. Local institutions bought a net 151.4 billion won worth of stocks.
Chemical shares fell sharply, leading the market decline. The country's biggest crude oil refiner SK Innovation plunged 4.66 percent to 153,500 won, and its smaller rival S-Oil tumbled 4.39 percent to 98,000 won. Leading chemical firm LG Chem retreated 3. 29 percent to 294,000 won.
Tech shares also lost ground. Market bellwether Samsung Electronics slid 1.32 percent to 1,342,000 won, and memory chip giant SK Hynix dropped 3.2 percent to 27,250 won. Consumer electronics behemoth LG Electronics declined 3.19 percent to 69, 700 won.
In contrast, auto shares ended slightly up. Top automaker Hyundai Motor inched up 0.19 percent to 257,500 won, and its affiliate Kia Motors rose 0.75 percent to 80,900 won.
The local currency finished at 1,138.5 won against the greenback, down 7.2 won from Friday's close.
Bond prices ended higher. The yield on the liquid three-year treasury notes dropped 0.04 percentage point to 3.38 percent, and the return on the benchmark five-year government bonds retreated 0. 04 percentage point to 3.48 percent. (Xinhua-ANI)
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