Seoul shares tick up on dip in oil prices

South Korean stocks closed slightly higher Wednesday as investors sat on their hands despite a fall in oil prices, due to concerns over U.S. inflation and interest rates.

The South Korean won gained slightly versus the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) added 0.23 point, or 0.02 percent, to 1,233.65. Volume was light at 173 million shares worth 2.12 trillion won (US$2.21 billion) with losers leading gainers 364 to 356. The blue-chip KRX 100 index fell 3.23 points, or 0.12 percent, to 2,558.70, and the tech-laced KOSDAQ index slipped 4.16 points, or 0.76 percent to 539.81.

The local currency ended at 957.80 won to the greenback, up 0.90 won from Tuesday's close, as domestic and foreign banks converted their dollar holdings into the won.

"Foreign selling and investors' worries over U.S. inflation and interest rates kept a lid on the market's gains stoked by a drop in oil prices," said Park Seok-hyun, an analyst at Kyobo Securities Co.

Kim Yong-gak, an analyst at Hyundai Securities Co., agreed with Park's view. "Investors seemed to remain jittery ahead of the release of the U.S. consumer price index in June and U.S. Federal Reserve Chairman Bernanke's testimony to Congress on Wednesday and Thursday," he added.

U.S. crude oil for August delivery fell $1.76, or 2.3 percent, to $73.54 a barrel on the New York Mercantile Exchange Tuesday.

Tech giant Samsung Electronics fell 0.34 percent to 580,000 won on foreign selling, while the nation's second largest electronics maker LG Electronics was up 0.39 percent at 51,700 won despite its second-quarter net loss, as its operating profit in the period exceeded the market consensus of 149 billion won. The company reported Wednesday its second-quarter earnings in a regulatory filling.

Korea Zinc, the world's largest zinc smelter by output, advanced 6.95 percent to 80,000 won after it said Tuesday its second-quarter net profit more than quadrupled from a year ago, topping market expectations.

Top steelmaker POSCO fell 1.53 percent to 225,500 won, extending its nine-session losing streak on concerns that a fall in prices of Chinese steel products would hurt its future performance.

The nation's third largest oil refiner S-Oil lost 2.80 percent to 66,000 won as Mirae Asset Securities doubted the possibility of Lotte Group acquiring the company.

The state-run Korea Gas Corp. rose 4.29 percent to 36,500 won on hopes that its gas field development projects in Myanmar would boost its earnings.

On the currency market, the won opened lower against the greenback, but dollar selling by exporters limited the won's fall, dealers said. The won gained against the dollar in afternoon trading as domestic and foreign banks sold the U.S. currency, they added.

Bond prices, which move inversely to yields, fell slightly. The return on the benchmark three-year Treasuries rose 0.01 percentage point to 4.89 percent, with the yield on the five-year government bonds up 0.01 percentage point to 4.99 percent.

Seoul, July 19 (Yonhap News)