SEOUL, Dec. 15 (Xinhua) -- South Korean shares fell Monday as Japanese Prime Minister Shinzo Abe's victory in elections fueled expectations for weak Japanese yen, which tumbled to a seven-year low versus the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) lost 1. 35 points, or 0.07 percent, to 1,920.36 at the close. Trading volume stood at 289.7 million shares worth 3.7 trillion won (3.37 billion U.S. dollars).
Abe's Liberal Democratic Party and its coalition partner Komeito Party won more than two-thirds of the 475 seats in the lower house, granting a fresh mandate to the Abe cabinet that implemented fiscal and monetary stimulus.
The Japanese yen rose slightly against the dollar as traders locked in profits, but expectations became stronger for the further yen weakness after Abe's election victory.
The weak yen used to act as a negative factor to the South Korean economy, which is dominated by a handful of large export companies, including Samsung Electronics and Hyundai Motor. The weak yen dents competitiveness of the exporters.
The KOSPI pared initial losses after falling below the psychological level of 1,900 in early trading, which triggered views that local stocks were undervalued.
Foreigners reduced stock holdings by 304.3 billion won, keeping a sales trend for a fourth straight session. Retail and institutional investors bought stocks worth 22.8 billion won and 165.7 billion won respectively.
Large-cap shares ended mixed. Market bellwether Samsung Electronics slid 1 percent, and top carmaker Hyundai Motor declined 2.2 percent. The state-run power supplier Korea Electric Power Corp. tumbled 5 percent, but Naver, the owner of most-used search engine, climbed 1.3 percent. The biggest mobile operator SK Telecom added 0.9 percent, and the No.1 auto parts maker Hyundai Mobis rose 0.8 percent.
The South Korean currency finished at 1,099.1 won against the greenback, up 4.0 won from Friday's close.
Bond prices ended mixed. Yields on the liquid three-year treasury notes gained 1.2 basis points to 2.124 percent, but the return on the benchmark 10-year government bonds lost 0.2 basis points to 2.693 percent.
