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Despite fresh tariff battle, local stocks close up

Aug 24,2018
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Seoul shares ended higher on Thursday as foreigners bought large-cap stocks, despite the United States and China imposing fresh duties on each other’s goods. The won depreciated against the dollar.

The benchmark Kospi rose 9.27 points, or 0.41 percent, to close at 2,282.60. Trading volume was moderately light at 5.1 trillion won ($4.6 billion). The gain marks the fifth day in a row that the Kospi has advanced.

Foreigners bought a net 174.8 billion won worth of stocks. Institutions sold a net 193.3 billion won while individuals offloaded a net 44.9 billion won.

“Foreign buying helped the main index close in positive territory,” said Shinhan Investment analyst Noh Dong-kil. “Investors hoped the United States and China will meet halfway on contentious trade issues during the two-day talks that began on Aug. 22. Export stocks will move depending on the results of the bilateral trade talks.”

Chinese officials flew to Washington for low-level trade talks scheduled between Aug. 22 and 23 in an attempt to avoid a full-fledged trade war. Despite the ongoing talks, the United States imposed additional 25 percent tariffs on $16 billion of Chinese imports on Thursday, as was previously announced. China retaliated by implementing 25 percent tariffs on U.S. goods worth the same amount.

Tech stocks led gains, with market bellwether Samsung Electronics rising 0.22 percent to 46,200 won and No. 2 chipmaker SK Hynix climbing 1.63 percent to 81,100 won.

Pharmaceuticals and cosmetics were also on the rise. Celltrion climbed 2.05 percent to 274,000 won and Hanmi Pharmaceutical inched up 0.56 percent to 447,500 won. Samsung BioLogics dropped 0.55 percent to 450,500 won. LG Household & Health Care jumped 5.21 percent to 1,252,000 won and Amorepacific surged 5.45 percent to 271,000 won.

Among decliners, top carmaker Hyundai Motor fell 1.19 percent to 124,500 won, while leading steelmaker Posco declined 2.16 percent to 317,000 won. The secondary Kosdaq climbed 5.33 points, or 0.68 percent, to 791.28. The tech and bio-heavy index was buoyed by a 0.8 percent increase in the U.S. Nasdaq index as well as large foreign buying of IT and pharmaceutical shares.

The Korean currency closed at 1,121.40 won against the U.S. dollar, up 2.50 won from the previous trading session. Bond prices, which move inversely to yields, ended mixed. The yield on three-year bonds rose 0.1 basis point to 1.96 percent, and the return on 10-year government bonds dropped 0.7 basis points to 2.40 percent.


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