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Trade war fears send Kospi to 14-month low

July 06,2018
The Kospi hit the lowest point in 14 months on Thursday as foreigners became net sellers amid concerns over a full-fledged trade war between the United States and China. The won depreciated against the dollar.

The benchmark Kospi fell 7.91 points, or 0.35 percent, to 2,257.55, weighed down by falling Chinese stocks and mass foreign selling. Trade volume was light at 5.06 trillion won ($4.5 billion).

Foreigners sold a net 94.8 billion won. Institutions bought a net 45.5 billion won while individual investors picked up a net 31.9 billion won.

“Many investors seem wary of a possible trade war between Beijing and Washington as local exporters are heavily exposed to the two trading partners,” said Jung Hun-seog, an analyst at Korea Investment & Securities. China and the United States are Seoul’s largest and second-largest export markets.

Market bellwether Samsung Electronics fell 0.65 percent to 45,950 won, and state-run utility Korea Electric Power Corporation declined 1.40 percent to 31,650 won.

Among gainers, top carmaker Hyundai Motor rose 1.67 percent to 121,500 won and leading steelmaker Posco climbed 1.31 percent to 309,000 won.

Other construction shares closed lower. Hyundai Engineering & Construction fell 3.98 percent to 53,100 won and GS Engineering & Construction dropped 1.63 percent to 45,200 won.

Pharmaceutical shares took a hit, falling 2.1 percent across sector. Market leader Celltrion dropped 3.26 percent to 282,000 won, while Samsung BioLogics declined 2.02 percent to 413,000 won.

The secondary Kosdaq dropped 5.05 points, or 0.63 percent, to 794.05. Institutional buying prevented the tech-heavy index from closing lower.

Institutions bought a net 33.4 billion won worth of shares.

Foreigners bought a net 32.2 billion won while individuals purchased a net 41.2 billion won.

The Kosdaq was also dragged down by falling construction shares which fell 2.6 percent across sector.

IT parts shares also fell 2 percent while transport shares dropped 1.6 percent.

The local currency closed at 1,118.60 won against the U.S. dollar, up 4.10 won from the previous session’s close.

Bond prices, which move inversely to yields, ended higher.

The yield on three-year bonds fell 2.3 basis points to 2.09 percent, and the return on 10-year bonds declined 0.2 basis points to 2.55 percent.

BY KIM EUN-JIN, YONHAP [kim.eunjin1@joongang.co.kr]
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