SEOUL, Apr 20: Seoul shares fell to a one-week low on Friday on renewed worries over the euro zone debt crisis and on doubts about the strength of U.S. economic recovery after lackluster jobs data.
The Korea Composite Stock Price Index (KOSPI) was down 1.34 percent at 1,972.98 points as of 0310 GMT.
Worries about the health of Spanish banks and the country’s fiscal situation escalated this week and jitters were aggravated by rumours, later denied, of a possible French rating downgrade.
‘Rumors buzzing around France and disappointing U.S. jobs data were the main drag on the index today, but resistance at the recent low near 1,970 points may be a springboard for recovery, especially with Japan and China showing steps towards monetary easing,’ said Um Tae-woong, an analyst at Bookook Securities.
Spain sold 2.5 billion euros in 2- and 10-year bonds, at the top end of the targeted amount, but yields on the key 10-year bond were higher, reflecting fears that it may miss budget deficit targets.
The number of Americans claiming unemployment benefits for the first time fell only slightly last week, suggesting a slowdown in job growth while other data showed factory activity in the U.S. Mid-Atlantic region declined steeply and U.S. Home sales fell for a second consecutive month.
Selling by offshore investors may extend for a fifth straight day, having sold a net 186.7 billion won ($164 million) of shares on Friday morning, making it the longest such streak in four months.
A slump in large-cap technology blue-chips weighed on the market, as LG Electronics tumbled 4 percent while Samsung Electronics fell 2 percent.
LG Chem shares plunged 8.1 percent after seeing its first-quarter profits slashed 45 percent compared to a year before, sandwiched between slowing demand in China and rising oil prices.
Shares in Korea Aerospace Industries (KAI) rose 3.7 percent after its major shareholders announced plans to pick advisors in April to manage a 40 percent stake sale worth $1.06 billion.
(AGENCIES)
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