Seoul shares ended lower on Friday despite a central bank decision to keep interest rates on hold, as foreign selling continued on persistent worries about inflation and monetary tightening. Foreign net selling stood at 615.7 billion won versus a three-month high of 1.1 trillion won ($984.7 million) on Thursday, stoking jitters about an exodus of foreign capital.
The Bank of Korea left interest rates unchanged, but remarks by its chief indicated a high chance of an increase next month with more tightening later in the year to tame soaring inflation, analysts said. Seoul shares rose after the rate freeze was announced during morning trade but fell into negative territory as foreign selling picked up.
The Korea Composite Stock Price Index (KOSPI) finished down 1.56 percent at 1,977.19 points. Hana said on Thursday it would raise 1.4 trillion won through a new share issue to fund its take-over of Korea Exchange Bank. Heavyweights such as auto and technology shares were weak, with Samsung Electronics down 2.24 percent and Hyundai Motor up 0.29 percent.
Steel shares retreated, with South Korea's top steelmaker POSCO slipping 0.93 percent and second-ranked Hyundai Steel diving 6.47 percent. While shipbuilders dropped, STX Offshore & Shipbuilding bucked the trend, rising 2.4 percent after it said it had won an $160 million worth order to build four bulkers.
Trading volume was 307.9 million shares worth 6.9 trillion won.The KOSPI 200 March futures index fell 4.95 points to 259.75 points. The KOSPI 200 spot index lost 4.17 points to 260.40 points. The junior Kosdaq index dipped 0.95 percent to 517.73 points.