Kospi edges down after Greek election
Korean shares ended almost flat Monday, edging down just 0.41 point or 0.22 percent to 1,935.68 as investors speculated that the Syriza party’s win in the Greek election will sap demand for riskier assets.Trading volume was moderate at 324.2 million shares worth 3.9 trillion won ($3.6 billion), with 404 gainers and 405 losers.
The Greek vote gave power to the Syriza party, which is committed to renegotiating the country’s debt obligations, and its win comes after the European Central Bank said last week it plans to implement a program of bond purchases to fight deflation in the region.
Foreign and institutional investors dumped shares on the Kospi on Monday. Foreign investors sold shares worth 101.7 billion won, ending a five-day buying streak, while institutional investors continued selling for the fourth trading day, shedding 91 billion won worth of shares. Retail investors bought 72.8 billion won worth of shares.
By industry, telecommunications shares rose 1 percent, while steel and metals fell 2 percent. Most large-cap shares fell, with Kia Motors losses hitting their lowest since 2010 after its profits fell short of estimates. Kia shares plunged 5 percent, while Hyundai Motor lost 2 percent.
Posco, the nation’s No. 1 steelmaker, declined 2.5 percent. Korea Electric Power Corporation, Naver, Samsung SDS and Cheil Industries all closed about 1 percent lower.
Korea’s government bonds rose with the increased demand for the relatively safe assets and on speculation that the ECB’s stimulus will boost demand for emerging-market assets. Sovereign notes gained for a second trading day, pushing the benchmark 10-year yield to a record low, and the won strengthened.
The yield on bonds due September 2024 fell three basis points, or 0.03 percentage point, to 2.30 percent in Seoul, according to the Korea Exchange prices. Earlier, it reached an unprecedented 2.26 percent. The won advanced 0.3 percent to 1,080.78 a dollar.
“Inflows are anticipated on the back of the ECB’s monetary easing,” said Moon Hong-cheol, a Seoul-based fixed-income analyst at Dongbu Securities.
“It’s natural for global investors to seek higher returns, and bond buying continues even though Korean yields are very low.”
BY KIM JUNG-YOON, BLOOMBERG [kjy@joongang.co.kr]
with the Korea JoongAng Daily
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