South Korean shares fell for four straight sessions on Monday as foreigners continued to offload local stocks amid concerns over the won's ascent to the U.S. dollar and the Japanese yen.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 6. 98 points, or 0.36 percent, to close at 1,939.71. Trading volume stood at 343.76 million shares worth 4.53 trillion won (4.19 billion U.S. dollars).
Major exporters led the market decline. Market bellwether Samsung Electronics sank 3.2 percent to 1,372,000 won after announcing the record-breaking fourth-quarter earnings last week.
Hyundai Motor, which depends on overseas markets for more than 80 percent of sales, declined 1.2 percent to 198,500 won. The nation's No.1 automaker posted a profit fall in the fourth quarter, despite its record global car sales, as stronger won worsened profitability.
Foreign investors led the market decline by dumping a net 506 billion won worth of local stocks. Foreigners kept their selling spree except for 7 trading days.
Institutional and retail investors purchased shares worth 430.1 billion won and 72.4 billion won, failing to drive up the main index.
Officials at the FX authorities raised their worrying voice over the stronger won. Finance Minister Bahk Jae-wan said the country is ready to tackle the stronger won, cautioning that aggressive monetary policy in Japan would lift costs through various channels such as government bond yield rises. Vice Finance Minister Shin Je-yoon warned over the currency war possibly accelerating.
Ha Sung Keun, Bank of Korea (BOK)'s monetary policy board member, told reporters on Monday that "it is not too much to say that currency war has started" with Bank of Japan (BOJ)'s plan to make Federal Reserve-type asset purchases a year later.
The BOJ said it would start its own quantitative easing with assets worth 13 trillion yen a month purchased from January 2014. The bank raised its inflation target by 1 percentage point to 2 percent. The South Korean won rallied 7.6 percent versus the greenback in 2012, while surging 19.6 percent to the yen last year.
Large-cap shares ended mixed. The nation's No.2 carmaker Kia Motors retreated 1.4 percent, and top steelmaker POSCO declined 3 percent. The world's largest shipbuilder Hyundai Heavy Industries fell 0.2 percent.
Memory chip giant SK Hynix rose 0.8 percent, and the nation's No.1 auto parts maker Hyundai Mobis added 0.2 percent. The world' s No.2 LCD manufacturer LG Display advanced 0.5 percent, and consumer electronics giant LG Electronics gained 0.8 percent.
The local currency finished at 1,093.5 won against the greenback, down 19 won from Friday's close.
Bond prices ended lower. The yield on the liquid three-year treasury notes gained 0.03 percentage point to 2.74 percent, but the return on the benchmark five-year government bonds added 0.03 percentage point to 2.85 percent.
