Seoul stocks end 0.02 pct lower on institutional sell-offs

(ATTN: ADDs bond yields at bottom; ADDs details of JP Morgan report in para 4)
By Lee Youkyung
SEOUL, Sept. 7 (Yonhap) -- South Korean shares finished 0.02 percent lower Monday
as institutional sell-offs outweighed thin buying from retail and foreign
investors, analysts said. The local currency rose against the U.S. dollar.
After a day of choppy trading, the benchmark Korean Composite Stock Price Index
(KOSPI) inched down 0.33 points to 1,608.57. Volume was thin at 405 million
shares worth 5.73 trillion won (US$4.64 billion) with losers leading gainers 420
to 375.
"The KOSPI rose in early trading tracking gains in U.S. and Asian markets, but
JPMorgan downgraded local stock markets, sending the KOSPI lower," said Hwang
Bin-ah, an analyst at Kyobo Securities.
JPMorgan downgraded its outlook for local markets to "neutral" from "overweight"
in a report released Saturday, stating that domestic issues, such as the
government's policy change, could limit the key index's upside movement.
Despite opening stronger in early trading boosted by lower-than-expected U.S. job
cuts in August, the KOSPI zigzagged between positive and negative territory.
Trading volume has declined as investors await a major rate decision by the
central bank on Thursday, Hwang added.
Financial and bank shares ended lower as the financial watchdog's decision to
rein in mortgage lending prompted investors to worry about a decrease in bank
profits. KB Financial Group, which controls the top lender Kookmin Bank, fell
2.69 percent to 54,300 won and No. 5 lender Korea Exchange Bank (KEB) dropped
3.49 percent to 11,050 won.
Green Cross Co. tumbled 6.76 percent to 165,500 won on profit-taking as the
pharmaceutical company's rally following its development of Influenza A vaccine
raised concerns that its shares may have been overheated.
But rallies in Chinese markets sent shares of local exporters higher, with auto
parts makers being the brightest spots. Hankook Tire Co., with its Chinese market
share reaching 15 percent, shot up 5.97 percent to 23,950 won as China's economic
recovery was expected to increase its profits.
Its smaller rival Kumho Tire Co. soared by daily limit of 14.93 percent to 6,850
won after unionized workers ended their strike over the weekend.
The local currency closed at 1,233.5 won to the greenback, up 8 won from Friday's
close, as offshore investors continued to buy local stocks, dealers said.
Bond prices, which move inversely to yields, closed lower. The return on
three-year Treasuries added 0.03 percentage point to 4.33 percent and the
benchmark yield on five-year government bonds gained 0.05 percent to 4.84
percent.
ylee@yna.co.kr
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