Seoul stocks end down 1.26 pct in volatile session

(ATTN: ADDS bond yields at bottom)
SEOUL, May 22 (Yonhap) -- South Korean shares closed 1.26 percent lower Friday
after a volatile session as tech, steel and shipyard shares sharply declined amid
jitters over a prolonged global economic slowdown. The local currency inched up
against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 17.9 points to
1,403.75. Volume was heavy at 667.4 million shares worth 7.78 trillion won
(US$6.23 billion), with losers outpacing gainers 492 to 323.
"Shares started lower as investor sentiment was hurt by overnight setbacks in
U.S. markets and moved up and down throughout the day," said Han Chi-hwan, an
analyst at Daewoo Securities. "Later sell-offs by institutions drove the index
lower."
Most shares ended lower, with tech, steel and shipbuilding companies among marked
decliners.
Chipmaking giant Hynix Semiconductor dived 5.95 percent to 12,650 on fears that
it could be affected by short-selling after the nation's financial watchdog said
Wednesday it will lift a ban on the trading practice for non-financial companies.
Short-selling, or the sale of shares by borrowing them in anticipation of price
falls, has been frequently blamed for battering the local bourse.
Tech bellwether Samsung Electronics also fell 2.31 percent to 550,000 won and
flat-panel maker LG Display plunged 4.38 percent to 28,400 won.
Steel and shipyard shares were severely dented amid downbeat economic outlooks.
Top steelmaker POSCO plunged 3.16 percent to 398,500 won, while leading shipyard
Hyundai Heavy Industries fell 3.59 percent to 228,000 won.
Financial shares, however, ended higher. Top brokerage Samsung Securities jumped
4.9 percent to 75,000 won, while its rival Mirae Asset Securities inched up 0.12
percent to 81,100 won.
On Thursday, Wall Street retreated amid worries over Britain's sovereign debt
rating with the Dow Jones industrial average falling 1.54 percent.
The local currency ended at 1,247.4 won against the dollar, up 1.2 won from
Thursday's close, as increasing worries over the U.S. economy turned investors
away from the greenback, dealers said.
Bond prices, which move inversely to yields, closed lower. The return on
three-year Treasuries rose 0.01 percentage point to 3.85 percent, and the
benchmark yield on five-year government bonds gained 0.02 percentage point to
4.55 percent.
kokobj@yna.co.kr
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