Seoul Shares Decline Amid Weak GDP Data and Rate Concerns

Seoul: Seoul shares closed lower Thursday, driven by losses in the technology sector and concerns over economic growth, as well as diminishing expectations for rate cuts by the Federal Reserve. Meanwhile, the Korean won ended its eight-day losing streak against the U.S. dollar. According to Yonhap News Agency, the Korea Composite Stock Price Index (KOSPI) dropped 18.59 points, or 0.7 percent, to close at 2,581.03. Trading volume was moderate, with 336.43 million shares exchanged, valued at 9.47 trillion won (approximately US$6.9 billion). Decliners outnumbered advancers by 613 to 256. Institutional and foreign investors sold a combined 653 billion won worth of stocks, offsetting individual investors' purchases, which amounted to 621 billion won. The decline in Seoul's stock market mirrored overnight losses on Wall Street, where the Dow Jones Industrial Average fell 0.96 percent to 42,514.95, and the Nasdaq Composite decreased 1.6 percent to 18,276.65. Earlier, the Bank of Korea announced that South Korea' s economy narrowly avoided a contraction in the third quarter, with a meager growth of 0.1 percent from the previous quarter. This figure was significantly below the market's median expectation of a 0.5 percent increase. In the local market, technology and automotive stocks led the declines. Key companies such as Samsung Electronics Co. saw their shares fall by 4.2 percent to 56,600 won. SK hynix Inc., another major chipmaker, experienced a 1.1 percent decline, closing at 198,200 won. Hyundai Motor Co., the leading automaker, dropped 5.2 percent to 228,500 won, while SK Innovation Co., a prominent refiner, decreased by 0.8 percent to 115,300 won. Conversely, Korea Zinc Co. emerged as a significant gainer, with its shares soaring by the daily limit of 30 percent to 1,138,000 won. This surge came as investors anticipated the outcome of a share buyback initiative led by Chairman Choi Yun-beom, aimed at defending the company against a takeover attempt by Young Poong Corp and private equity firm MBK Partners. K orea Electric Power Corp. also rose by 5 percent to 23,050 won, and Korean Air Co. increased by 0.6 percent to 23,450 won. The ongoing takeover battle for Korea Zinc intensified as Young Poong and MBK recently secured a 5.34 percent stake in the company at 830,000 won per share, raising their total stake to over 38 percent. Chairman Choi and his family's holdings in Korea Zinc currently stand at 15.6 percent, with friendly shares estimated to reach 34-36 percent. In the currency market, the Korean won was trading at 1,380.20 won per dollar at 3:30 p.m., gaining 2 won from the previous session. Bond prices, which move inversely to yields, rose, with the yield on three-year Treasurys falling 4.5 basis points to 2.891 percent, and the yield on five-year government bonds dropping 5.5 basis points to 2.956 percent.