S. Korean shares dip on Greece woes

| | Updated on: Dec 30, 2014

South Korean shares fell on Tuesday, the final trading day of the year for local markets, as political uncertainty in debt-laden Greece dampened investors’ appetite for riskier assets.

Greece is set to hold snap elections after Prime Minister Antonis Samaras failed to get sufficient votes for his presidential nominee, possibly opening the way for the anti-austerity Syriza party to take power.

The Korea Composite Stock Price Index (KOSPI) was down 0.6 per cent at 1,915.47 points as of 0210 GMT, on track for a 4.8 per cent loss for the year.

Liquidity infusion

Heading into the new year, the KOSPI is expected to gain more than 10 per cent en route to a four-year peak by the end of 2015 as major central banks outside the United States gear up to pump more liquidity into financial markets.

While the US Federal Reserve’s shift towards tight money policy remained a key risk, analysts say the Fed’s slow and prudent approach will absorb much of the shock on emerging market assets.

“The Federal Reserve’s altered policy statement was its strongest indication of interest rate normalisation yet, but it also brought relief to the market in also making clearer that a rate move is unlikely before April at least,’’ said Lee Chul-hee, an economist at Yuanta Securities Korea.

Airlines, transport stocks

Airlines and transport counters bucked the wider trend as slumping fuel prices were expected to boost their bottom lines. Leading gains, Asiana Airlines jumped 8 per cent.

Won vs dollar

The South Korean won edged lower against the dollar but the trade was thin as many investors have already closed their positions ahead of year-end.

The currency was quoted at 1,099.0 to the dollar as of 0210 GMT compared with 1,097.8 seen at Monday’s close.

It looked set for a decline of around 4 per cent for the year, amid a resurgent dollar and pressure from the weakening yen, with the Japanese currency creeping back towards a 7-1/2 year low versus the dollar.

The yen/won cross rate was sitting at 9.1203, a shade above a six-year low, placing investors on guard over possible intervention by the financial authorities to check the won’s strength against the yen.

Published on March 12, 2018

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