09.24 Mon

Business

Local markets fall on profit-taking from rally

July 17,2018
Korean stocks ended lower Monday, as investors secured their profits from the previous session’s rally while cautiously watching the development of global trade disputes. The Korean won depreciated against the U.S. dollar.

The benchmark Kospi shed 8.91 points, or 0.39 percent, to close at 2,301.99. Trade volume was light at 4.89 trillion won ($4.33 billion).

Institutions went on a selling spree, dumping 266.4 billion won worth of local stocks. Foreigners also shed a net 45.4 billion won, offsetting retail investors, who bought a net 288.9 billion won.

“We need to closely follow how things will go regarding the trade war between the United States and China. Some say the worst has passed, but fears are still running high among investors over a full-scale trade war,” said Kim Min-soo, an analyst at Hana Financial Group.

“Now second-quarter corporate reports are in the spotlight, which will make the market volatile for some time,” he added.

Financial stocks were bearish, as investors feared that trade rows would lead to diminishing trade volumes and worsen the prospects of the banking sector.

KB Financial Group shed 2.53 percent to 53,900 won and Woori Bank slid 1.77 percent to 16,650 won.

Tech shares also finished lower. Market kingpin Samsung Electronics fell 0.97 percent to 46,050 won and LG Electronics decreased 1.55 percent to 76,400 won.

Lingering concerns over trade protectionism also brought down steel shares.

Market leader Posco shed 0.47 percent to 315,000 won and Hyundai Steel retreated 0.82 percent to 48,550 won.

Retail shares suffered due to fears that the scheduled 10.9 percent hike in the hourly minimum wage to 8,350 won next year would hurt the profit of convenience store and grocery franchises. GS Retail nosedived by 10.7 percent to 34,200 won and Emart shares fell by 2.04 percent to 216,000 won.

The secondary Kosdaq fell 2.18 points, or 0.26 percent, to 825.71. Institutional and foreign investors sold semiconductor and pharmaceutical shares en masse to lock in gains after two consecutive sessions of increases to the tech-heavy index.

The local currency closed at 1,129.20 won against the U.S. dollar, up 5.7 won from Friday’s close.

Bond prices, which move inversely to yields, ended higher. The yield on three-year bonds fell by 1.7 basis points to 2.09 percent, and the return on 10-year bonds fell 1 basis point to 2.56 percent.


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