09.18 Tue

Business

Kospi inches up as investors look to the future

July 25,2018
Korean stocks advanced Tuesday as investors bought shares with strong growth prospects in the earnings season. The Korean won depreciated against the U.S. dollar.

The benchmark Kospi moved up 10.89 points, or 0.48 percent, to close at 2,280.2. Trade volume was moderate at 5.72 trillion won ($5.04 billion).

The index started lower but rebounded in the afternoon as foreigners and institutions picked up shares from companies with solid profits.

Foreigners bought a net 62.4 billion won and institutions purchased a net 239.9 billion won worth of local stocks. Retail investors dumped a net 300.2 billion won.

Construction and steel shares were among the top performing sectors, after the transport ministry said it will push for inter-Korean development projects such as railways and highways later this year.

“The key to opening the North Korean economy is building infrastructure on its soil,” said Yoon Seok-mo, an analyst at Samsung Securities. “Local companies in construction, energy, transportation, steel and machinery are expected to benefit from inter-Korean projects if the two Koreas reach an agreement on a wide range of large-scale projects.”

Hyundai Engineering & Construction jumped 7.8 percent to 53,900 won and GS Engineering & Construction vaulted 5.91 percent to 46,600 won.

Posco rose 2.52 percent to 325,000 won and its smaller rival Hyundai Steel picked up 2.26 percent to 49,800 won.

The state-run Korea Electric Power Corporation increased 2.79 percent to 33,150 won as the demand for electricity rose amid the record-breaking heat wave.

Shipbuilders were depressed after posting lackluster second-quarter earnings due to weak orders in the global market.

Hyundai Heavy Industries, the world’s biggest shipyard by sales, slipped 1.31 percent to 98,200 won, and its smaller rival Samsung Heavy Industries slid 2.38 percent to 6,150 won.

The secondary Kosdaq rose 4.61 points, or 0.61 percent, to 761.57, ending its seven-day downward streak. The tech and bio-heavy index won on foreigners’ bargain buying of pharmaceutical and semiconductor shares.

The Korean won closed at 1,135.2 won against the U.S. dollar, up 3.8 won from Monday’s close.

Bond prices, which move inversely to yields, ended lower. The yield on three-year bonds gained 1.5 basis points to 2.09 percent, and the return on 10-year bonds added 4.0 basis points to 2.58 percent.


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