South Korean stocks finished almost flat on Thursday as investors sat on the sidelines after the central bank decided to freeze the key rate for the month, analysts said. The South Korean won lost ground against the greenback.
The benchmark Korea Composite Stock Price Index edged up 0.48 point to end nearly unchanged at 1,914.14. Trading volume was low at 246.7 million shares worth 3.58 trillion won ($3.31 billion), with gainers outnumbering decliners 403 to 397.
Analysts said the local stock market failed to get a boost as the Bank of Korea chose to keep the base rate at the current level of 2 percent.
“Market players are feeling somewhat let down that the key rate was held at the current level, since they thought there was some room left for a further rate cut,” said Kim Yong-gu, an analyst at Samsung Securities Co.
The central bank kept the base rate at a record low of 2 percent for January, extending its wait-and-see stance to a third consecutive month as the government is rolling out stimulus plans to bolster growth.
The bank also lowered its economic growth and inflation outlook for this year as Asia’s fourth-largest economy continues to stumble due to lackluster domestic demand.
But the rate freeze was not a significant drag on stock prices as it was not an unexpected one, according to market analysts.
“Market expectations for a rate cut has not vanished completely and investors see that it’s only a matter of time before it takes place, so (the rate freeze) did not pose a threat to investors’ sentiment,” said analyst Kang Hyun-gie from I’M Investment & Securities Co.
Foreigners sold a net 211.39 billion won, and retail investors scooped up a net 28.66 billion won. Institutions bought more shares than they sold at 47.89 billion won.
Tech shares were mixed, as No. 2 chipmaker SK hynix rose 1.23 percent to 49,500 won while LG Electronics faltered 1.93 percent to 60,900 won. Flat screen provider LG Display added 0.28 percent to close at 36,350 won.
The world’s top handset maker Samsung Electronics ended bearish, moving down 0.82 percent to 1,334,000 won. Media reports earlier speculated the tech firm is in talks to take over its Canadian counterpart BlackBerry Ltd., although both firms denied having such discussions.
Autos traded mixed with industry leader Hyundai Motor backtracking 1.69 percent to 174,500 won while car parts maker Hyundai Mobis advanced 1.57 percent to 259,000 won. Kia Motors shed 2.05 percent to finish at 52,500 won.
Hyundai Glovis jumped 2.59 percent to close at 237,500 won, bouncing back up from its two-day losing streak, which had been sparked by Hyundai Motor Group Chairman Chung Mong-koo and his son’s failed attempt to sell off their shares in the logistics unit of the group through a block trade.
The country’s top portal operator Naver was buoyed by rosy fourth-quarter earnings forecasts, shooting up 5.14 percent to end at 777,000 won. On the other hand, Woori Bank, amid a grim earnings outlook, fell to its 52-week low of 9,000 won before ending the day at 9,050 won, down 1.84 percent from the previous session.
The local currency ended at 1,083.30 won against the U.S. dollar, down 1.10 won from Wednesday’s close.
Bond prices, which move inversely to yields, ended lower. The yield on three-year Treasurys jumped 7 basis points to 2.044 percent, and the return on the benchmark five-year government bonds soared 8.2 basis points to 2.171 percent. (Yonhap)
