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Business

Trade worries cause Kospi to drop on Monday

Sept 04,2018
Korean shares retreated Monday as investors dumped major tech stocks amid trade worries. The Korean won rose against the U.S. dollar.

The benchmark Kospi declined 15.85 points, or 0.68 percent, to close at 2,307.03. Trade volume was light at 3.7 trillion won ($3.3 billion).

The index started lower and went further south late in the afternoon as foreign and institutional investors dumped large-cap shares.

“Investors seem to have been closely watching the North American Free Trade Agreement [Nafta] negotiations between the United States and Canada,” said Lee Young-gon, a researcher at Hana Financial Investment, “as well as possible additional U.S. tariffs on Chinese imports.”

U.S. stocks closed on a mixed note at the end of last week, following reports that the U.S.-Canada talks on rewriting the Nafta ended without reaching a middle ground.

U.S. President Donald Trump said Saturday that Canada “will be out” of the deal unless the revised version is “fair” to America.

Foreigners sold a net 215 billion won and institutional investors offloaded a net 74 billion won worth of local stocks. Individuals bought a net 237 billion won, offsetting some of the losses.

Top cap Samsung Electronics surrendered 2.06 percent to close at 47,450 won. SK Hynix, a major chipmaker, moved down 2.89 percent to 80,600 won.

Steel shares were also in negative terrain, with No. 1 steelmaker Posco plunging 2.14 percent to close at 319,500 won. Hyundai Steel was down 2.81 percent to 51,800 won.

Leading carmaker Hyundai Motor remained unchanged at 125,000 won, and its smaller affiliate Kia Motors retreated 0.78 percent to end at 31,800 won.

Chemical shares were mixed. LG Chem, a major battery maker, soared 0.55 percent to 368,000 won.

Shipbuilders were winners, with Hyundai Heavy Industries gaining 1.69 percent to 120,000 won. Samsung Heavy Industries was up 2.12 percent, closing at 7,230 won.

The secondary Kosdaq fell 0.13 points, or 0.02 percent, to 816.84. The tech and bio-heavy index closed slightly lower on large institutional and foreign selling despite a 0.3 percent incline of the U.S. Nasdaq.

The Korean won closed at 1,110.30 won against the U.S. dollar, down 2.6 won from the previous session’s close.

Bond prices were also mixed. The yield on three-year bonds moved up 0.6 basis points to 1.92 percent, and the return on 10-year government bonds fell 1.9 basis points to 2.29 percent.


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