South Korean shares inch down after Yellen's nomination as Federal chief

South Korean shares fell Thursday on concerns over the prolonged shutdown of the U.S. government, but the fall was limited after the nomination of Federal Reserve Vice Chair Janet Yellen as next chief of the U.S. central bank. The benchmark Korea Composite Stock Price Index (KOSPI) fell 1. 36 points, or 0.07 percent, to close at 2,001.40. Trading volume stood at 219.49 million shares worth 3.85 trillion won (3.58 billion U.S. dollars). Concerns remained over the budget impasse that may lead to default on public debt for the first time in U.S. history. If Congress fails to raise the current debt limit of 16.7 trillion dollars by the deadline of Oct. 17, the U.S administration will face default. Those fears were offset by the nomination of Yellen as the next Fed chief. Expectations spread that the Fed would keep its current massive monetary stimulus as Yellen, widely seen as a policy " dove", was named to succeed outgoing Fed Chairman Ben Bernanke. "Policy coherence will be maintained as Yellen, the incumbent Vice Chair, becomes the next Fed chief," Bank of Korea (BOK) Governor Kim Choong-soo told a press conference after keeping the country's policy rate unchanged at 2.5 percent. The central bank froze the policy rate for the fifth straight month. Foreigners kept their longest buying streak by purchasing a net 140.3 billion won worth of local stocks. Offshore investors raised their holdings of stocks for 30 straight sessions, the longest winning streak since 1999 when the Korea Exchange began to compile the related data. Local institutions sold a net 291.3 billion won worth of stocks, but retail investors were net buyers of a net 160 billion won worth of shares. Large-cap shares ended mixed. Top automaker Hyundai Motor gained 2.8 percent, and its affiliate Kia Motors rose 1.6 percent. Memory chip giant SK Hynix advanced 2.6 percent, but POSCO, Samsung Life Insurance, SK Telecom and Hyundai Heavy Industries ended in negative territory. The South Korean currency finished at 1,073.6 won against the greenback, up 0.1 won from Tuesday's close. The local financial markets were closed on Wednesday for the Hangeul Day, which commemorates the proclamation of the Korean alphabet in 1446. Bond prices ended lower. The yield on the liquid three-year treasury notes rose 0.02 percentage point to 2.87 percent, and the return on the benchmark 10-year government bonds gained 0.05 percentage point to 3.51 percent.