South Korean shares were down in mid-morning trade on Wednesday, following wild fluctuations after liberal politician Moon Jae-in won the presidential election as investors took profit. Moon’s win was largely seen as positive for the economy, but many investors took profit from stocks which had sharply escalated to a record high in recent sessions. The Korea Composite Stock Price Index (KOSPI) was down 0.7 percent at 2,276.43 points as of 0250 GMT.
The index climbed as high as 2,323.22 but also swung into negative territory earlier. Ratings agency Moody’s said Moon’s election cleared any uncertainty that may have arisen from the political transition following a political scandal that saw former President Park Geun-hye impeached. Rhoo Yong-seok, a stock analyst at KB Securities, said it looked to be the right time for massive profit-taking. The KOSPI has risen around 7.2 percent during the past 10 sessions.
“It is true that there lie expectations about the new government spurring domestic demand, but the thing is that it will obviously take some time for actual policies to be carried out,” Rhoo said. Rhoo added he expects some more profit-taking throughout this week. Offshore investors were set to be net buyers for a fourth straight session, purchasing 10.1 billion won ($8.91 million) worth of KOSPI shares near mid-session.
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Retailers such as cosmetics company Amorepacific Corp rose as much as 5.4 percent on hopes the new South Korean government would ease tensions with China over the Terminal High Altitude Area Defense system (THAAD) issue. The dispute has led to an economic boycott of Korean goods and tourism. The spinoff and separate listing of three Hyundai Heavy Industries’ business divisions, which are Hyundai Robotics Co Ltd , Hyundai Construction Equipment Co Ltd , and Hyundai Electric & Energy Systems , began trading on Wednesday.
Decliners outnumbered advancers 439 to 356. The South Korean won edged down as tensions between North Korea and the United States rose after Pyongyang raised the number of Americans in their custody to four on Tuesday. The won was quoted at 1,133.3 to the dollar, down 0.2 percent compared with the previous close of 1,131.4. June futures on three-year treasury bonds shed 0.06 point to 109.30.
(Reporting by Dahee Kim; Editing by Jacqueline Wong)