09.20 Thu

Business

Local stocks drop on gov’t scrutiny of bio firms

July 26,2018
Korean stocks retreated Wednesday as investors sold off local stocks on news of strengthened government supervision of biopharmaceutical companies. The Korean won appreciated against the U.S. dollar.

The benchmark Kospi fell 7.17 points, or 0.31 percent, to close at 2,273.03. Trade volume was light at 6.02 trillion won ($5.34 billion).

The index started higher but stumbled during late morning trading, as foreigners sold off stocks amid trade tensions between the United States and China.

“Stocks showed big movement in some sectors, as investors reacted to a batch of quarterly reports amid lingering trade tensions,” said Seo Sang-young, a Kiwoom Securities analyst.

Foreigners sold a net 172.9 billion while individuals offloaded a net 125.7 billion won worth of stocks. Institutions bought a net 300.4 billion won, offsetting some of the losses.

Losses in bio shares dragged down the market, fuelled by the Financial Supervisory Service’s announcement Wednesday that it would strengthen supervision of pharmaceutical firms’ accounting activities following Samsung BioLogics’ accounting scandal.

Celltrion, a major pharmaceutical firm, dropped 5.28 percent to 251,000 won and Samsung BioLogics, Samsung’s health care unit, tumbled 5.36 percent to 388,500 won.

Tech heavyweights were mixed. Market bellwether Samsung Electronics was unchanged at 46,150 won, while SK Hynix, a major chipmaker, fell 3.71 percent to 80,500 won.

LG Display, the world’s largest display panel maker, surrendered 4.66 percent to 20,450 won after posting sluggish second-quarter earnings on weak global demand. SK sank 5.11 percent to 260,000 won after a dam being constructed in Laos by its engineering arm SK Engineering and Construction fell down on Monday, leaving many dead and missing. SK Engineering and Construction does not trade on the Kospi or the Kosdaq, the country’s secondary index.

LG Chem, a major battery maker, jumped 9.38 percent to 361,500 won after posting a stronger-than-expected operating profit in the second quarter.

The Kosdaq declined 12.68 points, or 1.66 percent, to 748.89. The tech-heavy index closed below the 750-point threshold, dragged down by foreign and institutional selling amid a 1.1 percent decline in the Philadelphia Semiconductor Index.

The Korean won closed at 1,126.3 won against the U.S. dollar, down 8.9 won from Tuesday’s close.

The yield on three-year bonds lost 1.3 basis points to 2.08 percent, and the return on 10-year bonds decreased 2.9 basis points to 2.55 percent.


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