South Korean shares declined on Monday on news that prosecutors requested an arrest warrant for the heir apparent of Samsung Group, the countrys largest family-run conglomerate.
The benchmark Korea Composite Stock Price Index (KOSPI) dipped 12.62 points, or 0.61 percent, to settle at 2,064.71. Trading volume stood at 676.22 million shares worth 4.65 trillion won (3.93 billion U.S. dollars).
The main index, which had traded in a slightly negative territory, expanded earlier losses to fall below the 2,060 mark right after the announcement that the independent counsel sought a warrant to detain Samsung Electronics Vice Chairman Lee Jae-yong.
The warrants validity will be determined on Wednesday, but worries spread about the KOSPIs largest-cap shares as Lee served as the groups de-facto head since his father Chairman Lee Kun-hee has been incapacitated in May 2014.
The younger Lee was accused of providing financial assistance to President Park Geun-hyes longtime confidante, Choi Soon-sil, and Chois daughter.
Prosecutors claimed it was provided in return for getting support in the 2015 merger of two Samsung affiliates to create a de-facto holding company, which is crucial to the heir apparent to inherit management control from his ailing father.
Market watchers, however, forecast the Samsung heirs detention issue would not have a long-term impact on the stock market, saying the news report triggered demand to lock in recent profits.
Foreigners dumped a net 239 billion won worth of local stocks, while individual and institutional investors bought shares worth 40 billion won and 185 billion won respectively. Large-cap shares ended mixed.
Market bellwether Samsung Electronics declined 2.1 percent, and memory chip giant SK Hynix lost 2 percent. Leading chemical firm LG Chem shed 1.6 percent, but top automaker Hyundai Motor added 1 percent.
Leading cosmetics company Amore Pacific advanced 2.2 percent, but Samsung Engineering declined 3.4 percent.
South Koreas currency finished at 1,182.1 won against the greenback, down 7.4 won from Fridays close. Bond prices ended mixed. Yields on the liquid three-year treasury notes lost 0.2 basis points to 1.633 percent, but the return on the five-year government bonds gained 0.4 basis points to 1.814 percent.
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