Stocks end six-day win streak after value-up program disappoints investors again

Korea's stock market ended a six-day winning streak, with the Kospi declining 1.34% as investors reacted to details of a new value-up index. Major financial stocks and LG Electronics saw significant losses.

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,596.32 points on Tuesday. [NEWS1]

Shares closed more than 1 percent lower Wednesday to end their six-day winning streak as investors expressed disappointment with Korea's new stock index set to be launched next week. The local currency rose in value against the dollar.

The benchmark Kospi declined 1.34 percent, or 35.36 points, to 2,596.32.

Trading volume was moderate at 441.8 million shares worth 11.4 trillion won ($8.6 billion), with losers outnumbering winners 516 to 355.

Retail investors and institutions bought a combined 585.7 billion won worth of local shares to offset foreigners' purchase of 573.1 billion won.

Overnight, major U.S. indexes gained ground amid growing hopes for additional rate cuts from the U.S. Federal Reserve.

“The Kospi slid as the majority of investors showed disappointment in the details of the value-up index unveiled the previous day,” said Lee Kyoung-min, an analyst at Daishin Securities.

Lee said investors largely dumped shares listed in the Korea Value-up Index.

The Korea Exchange unveiled the constituents of the new index, aimed at boosting the corporate value of domestic companies, which is set to be launched next week, after the stock market closed Tuesday.

Financial shares, which had been in the spotlight thanks to expectations of the value-up program, dragged down the Kospi.

KB Financial dropped 4.76 percent to 78,100 won, Shinhan Financial Group slid 5.14 percent to 53,500 won, and Samsung Life Insurance plummeted 4.49 percent to 93,600 won.

Samsung Biologics and Celltrion decreased 3.23 percent and 2.68 percent to 1.05 million won and 200,000 won, respectively.

Home appliances maker LG Electronics shot down 6.96 percent to 105,600 won.

Chipmaker SK hynix, however, gained 1.1 percent to reach 165,300 won, while Samsung Electronics lost 1.58 percent to 62,200 won.

LG Chem was also among the few gainers, climbing 0.72 percent to 348,500 won.

The local currency was trading at 1,331 won against the greenback as of 3:30 p.m., down 3.9 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds lost 3.60 basis points to close at 2.812 percent, and the return on the benchmark U.S. 10-year government bond decreased 1.8 basis points to 3.729 percent.

BY YOON SEUNG-JIN, YONHAP [yoon.seungjin@joongang.co.kr]