Seoul stocks end 0.87 pct down despite rate cut

(ATTN: ADDS details in penultimate para, bond yields at bottom; CORRECTS name of
Kookmin Bank in para 6)
SEOUL, Feb. 12 (Yonhap) -- South Korean stocks closed 0.87 percent lower Thursday
despite the central bank's rate cut, as economic concerns dampened investor
sentiment, analysts said. The local currency fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) declined 10.34 points to
1,179.84. Volume was moderate at 480.5 million shares worth 4.7 trillion won
(US$3.3 billion), with losers outpacing gainers 436 to 411.
"The rate reduction failed to calm investors' jitters about the stagnant
economy," said Kwak Joong-bo, an analyst at Hana Daetoo Securities.
Earlier in the day, the Bank of Korea slashed the policy rate by half a
percentage point to a new record low of 2 percent in a bid to kick-start the
sagging economy.
Financial shares led the drop as lenders released disappointing fourth-quarter
earnings. Woori Finance Holdings, which owns third-largest lender Woori Bank,
lost 7.54 percent to 7,230 won after announcing it swung to a loss of 664.8
billion won last quarter.
KB Financial Group, which controls top lender Kookmin Bank, also dropped 5.35
percent to 32,700 won with Shinhan Financial Group also losing 4.83 percent to
27,600 won.
Local lenders suffered heavy losses last quarter on swelling loan-loss reserves
as a number of businesses were exposed to potential defaults following sales
drops.
Chip giant Samsung Electronics, however, closed up 1.36 percent to 520,000 won on
expectations it will remain competitive, even after Japanese chipmaker Elpida
Memory's consolidation with Taiwanese chip producers.
The local currency fell to a near two-month low of 1,404 won to the dollar, down
10.5 won from Wednesday's close, on foreigners' stock selling and the rate cut,
dealers said.
Bond prices, which move inversely to yields, closed mixed. The return on
three-year Treasuries fell 0.04 percentage point to 3.62 percent while the
benchmark yield on five-year government bonds inched up 0.01 percentage point to
4.54 percent.
pbr@yna.co.kr
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