09.25 Tue

Business

Local stocks drop to lowest level in 15 months

Aug 17,2018
Korean stocks tumbled nearly one percent to a 15-month low on Thursday as foreigners went on a selling spree. The local currency depreciated against the U.S. dollar.

The benchmark Kospi sank 18.11 points, or 0.8 percent, to close at 2,240.8, the lowest level since May 2, 2017, when the index finished at 2,219.67. Trading volume was moderate at 5.93 trillion won ($5.25 billion).

“A strengthening U.S. greenback brings with it weaker emerging market currencies, especially the Chinese yuan and the Korean won as well,” said Kim Young-hwan, a senior analyst from KB Financial Group’s research center. “Foreign investors here are pulling their money out of the Korean market, as they want to avoid further foreign exchange losses.”

Kim also noted that doubt about the future business climate for Korea’s key industries, including semiconductors, IT and automobiles, weighed heavily on the market.

Amid lower domestic investor sentiment and ongoing concerns over the Turkish lira crisis, news of Washington and Beijing’s resumption of low-level talks on resolving their trade war helped the main index recover some losses later in the session.

Foreigners offloaded a net 241.8 billion won worth of local shares, while institutions sold a net 7 billion won. Individuals bought a net 178.3 billion won.

Top cap Samsung Electronics, the largest chipmaker in the world, sank 1.99 percent to 44,250 won, and its rival SK Hynix lost 1.58 percent to 74,700 won.

Naver, the country’s No. 1 online portal operator, slid 0.92 percent to finish at 750,000 won, while No. 2 Kakao stayed flat at 127,500 won.

Leading shipbuilder Hyundai Heavy Industries fell 4.17 percent to 103,500 won, and Samsung Heavy Industries fell 1.5 percent to 6,580 won.

Financial shares also went south, with Shinhan Financial Group dipping 0.81 percent to 42,650 won and Samsung Life Insurance declining 2.24 percent to 91,500 won.

The secondary Kosdaq inched down 0.76 points, or 0.10 percent, to 761.18. The tech-heavy index closed nearly unchanged as institutions and foreigners bought more shares than they sold amid weakened investor sentiment from geopolitical concerns.

The Korean won closed at 1,130.1 won against the U.S. dollar, up 2.2 won from the previous trading session.

Bond prices ended higher. The yield on three-year bonds fell 1.3 basis points to 2.05 percent, and the return on 10-year government bonds dropped 2.8 basis points to 2.48 percent.


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