[THE INVESTOR] Fears of a potential rate hike in the US saw Korean shares sharply fall Aug. 22, with foreign investors and institutions seeking to lock in their early gains. The local currency also fell sharply against the US dollar.

The benchmark KOSPI lost 14.08 points, or 0.68 percent, to close at 2,042.16. Trading volume was slim at 339.7 million shares worth some 4.03 trillion won (US$3.59 billion).

The index opened slightly lower, following Wall Street losses Friday.

The decline accelerated as foreign and institutional investors turned to selling in an apparent attempt to cash in their gains.

“Market concerns over a possible US rate hike might explain the selling by foreign and institutional investors, as Federal Reserve Chair Janet Yellen is scheduled to give a public speech this week, possibly hinting at a rate hike in the near future,” Hyundai Securities analyst Bae Sung-young said.

Foreigners off-loaded a net 15.8 billion won, while institutional investors dumped a net 180.5 billion won. Retail investors were net buyers, purchasing a net 85.7 billion won.

The selling by foreign and institutional investors also followed two days of a record-breaking bullish run by market top cap Samsung Electronics, which closed at a record high of 1,675,000 won on Friday.

Samsung Electronics shares lost 0.6 percent to close at 1,665,000 won Monday.

“Institutions were net sellers as they continued to take advantage of the recent gain in the KOSPI,” Bae noted.

(theinvestor@heraldcorp.com)