[11:07:33 ?] Mena Yahya: Korean shares drop on Fed's stimulus cut

South Korean shares dropped on Monday, opening after the Lunar New Year holiday's closure last week, as the U.S. Federal Reserve's additional stimulus cut was reflected belatedly on the local market. The benchmark Korea Composite Stock Price Index (KOSPI) sank 21. 19 points, or 1.09 percent, to close at 1,919.96. Trading volume stood at 226.81 million shares worth 3.9 trillion won (3.6 billion U.S. dollars). The country's financial market has been closed since last Thursday on the Lunar New Year holiday, during which the Fed cut back on its monthly bond purchases further by 10 billion dollars to 65 billion dollars starting from this month. The U.S. central bank scaled back its asset purchases by the same size last month. Amid fears over the additional Fed tapering, currencies of some emerging economies, which have weak economic fundamentals, plunged over the past two weeks. Currencies of Argentina, Turkey, Russia and South Africa showed underperformance continuously against the dollar amid concerns over foreign capital exodus. The South Korean currency finished at 1,084.5 won against the greenback, down 14.1 won from Wednesday's close. It was the biggest fall in more than seven months. Foreigners were net sellers in the local stock market by offloading local stocks worth more than 400 billion won. Retail and institutional investors bought stocks worth 202 billion won and 217 billion won respectively, limiting the KOSPI's further decline. Major large-cap shares ended in negative territory. Market bellwether Samsung Electronics retreated 0.6 percent, maintaining its downward trend for four straight sessions. Top automaker Hyundai Motor slid 1.3 percent, and its affiliate Kia Motors lost 0.7 percent. The world's No.3 smartphone maker LG Electronics sank 3.5 percent, but memory chip giant SK Hynix added 0.3 percent. Leading web search engine operator NAVER inched up 0.1 percent, and the state-run power supplier Korea Electric Power Corp. gained 0.7 percent. Bond prices ended mixed. The yield on the liquid three-year treasury notes closed unchanged at 2.88 percent, but the return on the benchmark 10-year government bonds fell 0.01 percentage point to 3.60 percent.