South Korean stock market closed lower as Samsung Electronics' (005930, Financial) earnings forecast fell short of market expectations, affecting major chipmakers' stock prices. The Korea Composite Stock Price Index (KOSPI) dropped by 0.61%, closing at 2,594.36 points.
Most economists surveyed by Reuters expect the Bank of Korea to cut the benchmark interest rate by 25 basis points to 3.25% this Friday.
Samsung Electronics (005930, Financial) fell 1.15% after the chipmaker warned that its third-quarter profit would be below market expectations. Its counterpart, SK Hynix, also saw a decline of 3.73%. A lead analyst from Eugene Investment Securities noted that the lower-than-expected earnings support the view that profits have peaked, adversely affecting chip stocks.
Among other index heavyweights, battery manufacturers and e-commerce companies experienced gains, while automobile manufacturers saw declines. Korea Zinc edged up 0.51% following a warning from market regulators to parties vying for control of the company to avoid interfering with other takeover bids, deeming excessive competition undesirable.
Foreign investors net sold shares worth 372.024 billion won in the KOSPI market.
Investors are awaiting the results of the FTSE Russell's review of the FTSE World Government Bond Index (WGBI) to determine if South Korea will be included after being on the watch list for two years. The review results are expected later today.
South Korean financial markets will be closed on Wednesday due to a public holiday.
