Seoul shares lost ground on Tuesday on profit-taking after recent run-ups and as foreign investors turned daily net sellers for the first time in nearly a month. The Bank of Korea held the policy interest rate steady on Tuesday, in a widely expected move which had a limited impact on the market, analysts said.
The Korea Composite Stock Price Index ended down 1.55 percent at 2,089.40 points. The KOSPI 200 June futures fell 4.3 points to 277.15 and the KOSPI 200 spot index dropped 4.36 points to 276.13. The junior Kosdaq market ended down 1.5 percent at 525.11. Foreign investors were sellers of a net 227.4 billion won ($208.9 million) worth of stocks, ending a buying spree that lasted 19 straight sessions.
"This appears to be a technical correction after a rise following Japan's March 11 earthquake, tsunami and subsequent nuclear crisis. There is also caution about options expiry on Thursday and corporate earnings," Lee Seung-woo, an analyst at Daewoo Securities, said. "But shares are unlikely to fall much, as oil prices have not reached levels where they will derail recovery," he said.
A decline in crude oil prices on Tuesday from a 32-month high that could extend in the near term triggered a bout of profit taking in risky assets. South Korea's central bank held interest rates steady on Tuesday as expected but signalled further increases would likely be needed to contain mounting inflation, opening the door to more gains for the won.
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