S Korean stocks close down on worries over U.S. mortgage agency

08:56, May 12, 2010      

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South Korean stocks closed lower Tuesday, after showing signs of recovery in the previous session, on financial concerns over Fannie Mae, or the Federal National Mortgage Association of the United States, local analysts said.

The benchmark Korea Composite Stock Price Index (KOSPI) went down 7.39 points, or 0.44 percent, to close at 1,670.24, the bourse operator Korea Exchange (KRX) said.

Seoul shares showed earlier gains of up to 0.7 percent after reports of European nations extending 750 billion euro financial backings to debt-ridden European countries, including Greece, but it was offset by news that U.S. state mortgage agency Fannie Mae was seeking additional funding from the government, according to local analysts.

Financial firms saw decreases with market leader KB Financial Group dropping 2.83 percent and rival Shinhan Financial Group closing 2.21 percent lower.

Market giant Samsung Electronics also saw losses after its parent company Samsung Group announced its 23.3 trillion won (20.5 billion U.S. dollars) investment plan on environmental and healthcare businesses by 2020, falling 1.49 percent to 791,000 won (696.3 U.S. dollars).

Meanwhile, the junior bourse KOSDAQ closed up 0.06 points, ending trading at 512.22, the KRX said.

The local currency ended at 1,135.7 won to the U.S. dollar, down 3.60 won from Monday's close.

Bond prices closed higher with the yield on three-year Treasury notes moving down 0.07 percentage point to end at 3.64 point.



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