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Korea ends down 2 pct on futures-linked sale

SEOUL: Share prices on South Korea's benchmark index ended two percent lower on Friday as a heavy bout of futures-linked arbitrage sales emerged towards the close of trading, analysts said.

The selling dealt a blow to top index movers such as SK Telecom, Samsung Electronics and Pohang Iron & Steel (POSCO) they said.

The Korea Composite Stock Price Index (KOSPI) closed down 18.38 points or 2.05 percent at 879.14 after peaking at 918.04 points. "It happened in a twinkling. About 280 billion won worth of futures-linked sales emerged at the very last minute and pulled the index more than two percent lower," said Sohn Jae-hwa, a strategist at Hanjin Investment and Securities.

Top mobile phone service provider, SK Telecom, was hit most and shed 9.8 percent to 3.8 million won.

Samsung Electronics, the world's largest memory chip maker, lost much of its earlier gains, ending up only 4.3 percent at 265,000 won.

"Institutions dumped their futures contracts en masse and the loss in futures index triggered hefty selling on the spot market," said Park Hyo-jin, a strategist at Shinhan Securities.

March Kospi 200 futures: closed down 0.80 of a point at 112.50 after hitting the day's high of 116.35, while the underlying Kospi 200 index fell 2.34 points at 110.45.-Reuters