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South Korean shares fell for seven straight sessions Monday as the sharp increase in the won/dollar exchange rate boosted worries about volatile foreign exchange market.
The benchmark Korea Composite Stock Price Index (KOSPI) slid 7. 77 points, or 0.39 percent, to close at 1,968.39, marking the lowest close since June 20. Trading volume stood at 315.35 million shares worth 4.2 trillion won (3.93 billion U.S. dollars).
The KOSPI took a strong start on Wall Street's gains last weekend, but it turned lower as the won/dollar exchange rate opened the trading at 1,074.9 won per dollar, rising above the 1, 070 won level for the first time since March 28.
The South Korean currency finished at 1,069.0 won against the greenback, down 7.6 won from Friday's close.
The depreciation of the South Korean currency is usually viewed as a positive factor as it boosts overseas earnings of domestic exporters converted into the local currency.
The strong dollar trend was expected to continue for the time being as the U.S. Federal Reserve was forecast to raise interest rates in the second half of next year.
After upbeat U.S. jobs data, worries spread over the earlier- than-expected rate hike in the United States. U.S. non-farm payrolls increased 248,000 in September, beating market expectations. The jobless rate fell to 5.9 percent last month, marking the lowest since July 2008.
Foreigners reduced stock holdings by 199.1 billion won, keeping a selling trend for three straight sessions, but institutional and retail investors bought shares worth 29.3 billion won and 155.3 billion won respectively.
Market bellwether Samsung Electronics gained 0.9 percent ahead of the release of its third-quarter earnings on Tuesday. Market expectations for Samsung earnings were lowered on worries about slowing demand for Samsung smartphones and fiercer competition with rivals. Samsung earnings were expected to beat market expectations.
Top automaker Hyundai Motor advanced 2.5 percent, and the biggest auto parts maker Hyundai Mobis increased 1.3 percent. The No.2 carmaker Kia Motors climbed 2.4 percent, but memory chip giant SK Hynix tumbled 5.1 percent after Samsung's announcement to set up a large-scale semiconductor plant in Pyeongtaek, 70 km south of Seoul.
The state-run power supplier Korea Electric Power Corp. declined 3.2 percent, and top steelmaker POSCO lost 2.8 percent. Naver, the owner of most-used search engine, slid 1.6 percent.
Bond prices ended lower. Yields on the liquid three-year treasury notes climbed 1.6 basis points to 2.263 percent, and the return on the benchmark ten-year government bonds added 1.4 basis points to 2.846 percent.
