South Korean stocks closed lower on Wednesday, ending a three-day winning streak as retail investors took profits following a rally in tech and shipbuilding shares. The Korean won rose at its sharpest pace against the U.S. dollar in over three years after strong verbal intervention by foreign exchange authorities. The benchmark KOSPI fell 0.21 percent to 4,108.62.
On December 24, South Korean stocks ended lower in Seoul, snapping a three-day winning streak as retail investors cashed in profits from a recent rally in tech and shipbuilding shares. The benchmark Korea Composite Stock Price Index (KOSPI) started higher but closed down 8.7 points, or 0.21 percent, at 4,108.62. Trading volume was moderate at 351.5 million shares valued at 11.95 trillion won ($8.2 billion), with 481 decliners outnumbering 378 advancers.
Despite gains on Wall Street driven by stronger-than-expected U.S. growth data and a bullish tech sector, retail investors sold a net 717.5 billion won worth of shares amid profit-taking. Foreigners and institutions bucked the trend, buying net 520 billion won and 200 billion won, respectively.
The Korean won strengthened sharply to 1,449.8 per U.S. dollar by 3:30 p.m., up 33.8 won from the prior session and marking its biggest daily gain in more than three years. This followed verbal intervention from foreign exchange authorities, who stated that an excessively weak won was 'not desirable' and pledged a 'strong commitment' to stabilize the market. The currency had hovered near its 16-year low against the dollar despite prior stabilization efforts.
Key stock movers included Samsung Electronics, down 0.36 percent to 111,100 won, and SK hynix, up 0.68 percent to 588,000 won. Hyundai Motor rose 0.7 percent to 289,000 won, while Kia gained 0.68 percent to 121,000 won. Doosan Group surged nearly 4 percent to 811,000 won on expectations of acquiring SK Siltron, and POSCO Group soared 3.29 percent to 314,000 won. Young Poong plunged 9.32 percent to 50,600 won after a court dismissed its injunction against Korea Zinc's capital increase plans. Shipbuilders retreated: Hanwha Ocean fell 3.57 percent to 119,000 won, HD Korea Shipbuilding dipped 3.7 percent to 416,000 won, and HD Hyundai Heavy tumbled 2.63 percent to 519,000 won.
'The KOSPI turned lower despite continued purchases by foreigners and institutions as retail investors took profits from recently bullish shares,' said Lee Kyoung-min, an analyst at Daishin Securities, adding that FX volatility also dampened risk appetite.
Bond yields declined, with the three-year Treasury falling 2.4 basis points to 2.939 percent and the five-year note dropping 3.1 basis points to 3.211 percent.
