SEOUL: South Korean stocks sank on Friday due to poor earnings outlook for shipbuilders and profit-taking on Samsung affiliates following a crucial vote on their merger, analyst said. The Korean won rose against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) shed 11.09 points, or 0.53 percent, to close at 2,076.79. Trading volume was overwhelming at 806.11 million shares worth 8.3 trillion won (US$7.23 billion), with losers beating winners to 534 to 283.
Analysts said investors digested mixed corporate news ahead of the earnings season, offloading shipbuilding, auto and chemical sectors on concerns over their weak bottom lines for the second quarter.
“Shipbuilders and auto shares led the decline, while banks that hold sizable loans to some of the troubled companies also struggled,” Cho Byung-hyun, an analyst at Yuanata Securities, said. “Investors locked in profits from recent gains to get ready for the next move before the earnings season.”
Two affiliates of Samsung Group plummeted as investors cashed in part of recent gains after their shareholders backed their merger deal in the face of strong challenge from U.S. hedge fund Elliott Associates.
Samsung C&T, a construction and trading unit, plunged 10.39 percent to 62,100 won, falling 22.7 percent from the previous peak reached on June 8 following the merger announcement.
