Seoul stocks drop 2.8 pct on U.S., China losses

(ATTN: ADDS bond yields at bottom)
SEOUL, Aug. 17 (Yonhap) -- South Korean stocks closed 2.79 percent lower Monday
as investors were spooked by U.S. losses last week and bearish Chinese stocks,
analysts said. The local currency plunged against the U.S. dollar.
The benchmark Korean Composite Stock Price Index (KOSPI) slumped 44.35 points to
1,588.73. Volume was moderate at 585.9 million shares worth 6.7 trillion won
(US$5.3 billion) with losers outnumbering winners 673 to 158.
"Following recent run-ups, the local market underwent a correction in line with
plunging overseas stock markets," said Kim Hak-kyoon, an analyst at Korea
Investment & Securities.
Grim consumer data for August dented Wall Street shares on Friday while fears
that the Chinese government may move to squeeze liquidity sent China's benchmark
stock index sharply lower.
Large-cap shares led the broad-based pull-back here, with financial shares taking
the hardest blow as investors pocketed profits from recent gains. Second-largest
financial service firm Woori Finance Holdings plummeted 4.5 percent to 13,800 won
and Hana Financial Group tumbled 5.81 percent to end at 32,400 won.
Constructors also closed sharply lower with top builder Daewoo Engineering &
Constructor sinking 5.19 percent to 14,600 won.
Hyundai Merchant Marine, which is affiliated with inter-Korea industrial park
operator Hyundai Asan, surged 3.65 percent to 31,200 won after North Korea said
as it will resume the joint venture and the firm's North Korean tour program
stalled since late 2008.
Drug-makers also finished sharply higher as investors bet reports of first deaths
from influenza A may up demand for antiviral vaccines. Leading vaccine producer
Green Cross soared by the daily limit of 14.68 percent to 144,500 won.
Airliners, meanwhile, lost ground as the influenza threats are expected to reduce
demand for air travel. Top air carrier Korean Air Line skidded 5.05 percent to
43,200 won and smaller rival Asiana Air sank 3.91 percent to settle at 3,930 won.

The local currency ended at 1,256.9 won to the U.S. dollar, down 17.7 won from
Friday's close as investors reduced appetites for emerging currencies on weak
U.S. economic data, dealers said.
Bond prices, which move inversely to yields, closed sharply higher. The return on
three-year Treasuries dropped 0.15 percentage point to 4.46 percent and the
benchmark yield on five-year government bonds declined 0.13 percentage point to
4.93 percent.
pbr@yna.co.kr
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