S. Korean shares fall on Japan, geopolitical risks

South Korean shares fell for five straight days on Friday as geopolitical risks escalated on the Korean Peninsula amid worries over weaker competitiveness of local exporters after Japan expanded its monetary easing policy. 

The benchmark Korea Composite Stock Price Index (KOSPI) fell 32. 22 points, or 1.64 percent, to close at 1,927.23. Trading volume stood at 366.66 million shares worth 4.85 trillion won (4.29 billion U.S. dollars). 

Tensions have been running high on the Korean Peninsula after the DPRK staged its third nuclear test on Feb. 12 in a protest against the joint military drills between Seoul and Washington.post lift 

On Wednesday, Pyongyang banned the entry of South Korean workers to the Kaesong industrial park, allowing only for their departure from Kaesong. The inter-Korean industrial zone, launched in late 2004, is housing around 120 South Korean companies that are employing some 54,000 DPRK workers. 

Unification Minister Ryoo Kihl-jae said that Seoul "is not considering" the pullout from the joint industrial park at Kaesong, the DPRK's border town, but he noted that the withdrawal could be carried out for the safety of workers there "when the situation requires." 

Foreign funds reduced their holdings of stocks by 672.2 billion won, the largest daily reduction in 2013. Retail and institutional investors bought shares worth 287.7 billion won and 378.6 billion won each,knife sets limiting the KOSPI's fall. 

Concerns about the weak yen trend were boosted after the Bank of Japan (BOJ) eased monetary policy in a more aggressive manner than market had anticipated. 

The BOJ vowed to achieve 2 percent inflation within two years at the first policy meeting presided over by new governor Haruhiko Kuroda. The bank changed its target for money-market operations from the overnight call rate to the monetary base, or cash in circulation and money that financial institutions have on deposit at the central bank. 

The central bank pledged to purchase 7 trillion yen in government debts every month, while lengthening the average remaining maturity of bond holdings to 7 years from 3 years. It will also buy high-risk assets, including exchange-traded funds and real-estate investment trusts. 

Large-cap shares ended bearish. Market bellwether Samsung Electronics slid 0.1 percent, and the nation's biggest steelmaker POSCO declined 2.65 percent.Mobile crushing machine Top automaker Hyundai Motor plunged 4. 4 percent, and its affiliate Kia Motors tumbled 4.7 percent. Memory chip giant SK Hynix lost 2.Spring cone crusher2 percent, and leading chemical firm LG Chem retreated 2.prepreg7 percent. 

The local currency finished at 1,131.8 won against the greenback, down 8.0 won from Thursday's close. 

Bond prices ended higher. The yield on the liquid three-year treasury notes lost 0.04 percentage point to 2.44 percent, and the return on the benchmark five-year government bonds slid 0.03 percentage point to 2.54 percent.