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Kospi loses 1.9% on global recession tremors

Mar 26,2019
Korean stocks fell at their steepest rate in five months Monday as investors dumped local shares amid fears of a global economic recession. The won depreciated against the dollar.

The benchmark Kospi shed 42.09 points, or 1.92 percent, to 2,144.86. It is the largest daily loss since October 23, 2018, when the index lost 55.61 points.

Trade volume was slim at 302.1 million shares, worth 4.05 trillion won ($3.57 billion).

“The reversal of bond yield curves sparked concerns over a global slowdown,” said Lim Sang-kook at KB Securities. “A sharp drop in the U.S. financial market last week affected Korean stocks.”

Growth worries are spreading across the world due to a reversal of short- and long-term bond yield curves on Wall Street last week.

An inverted curve, especially between the three-month yield and 10-year yield, is considered an indicator of economic sluggishness.

Individuals bought a net 270-billion-won worth of stocks and foreign investors sold a net 69.1-billion-won worth of shares. Institutions sold a net 224.2 billion won of stocks.

Losses from big-cap shares led the decline across the board.

Tech behemoth Samsung Electronics, the largest share in terms of market capitalization, sank 2.26 percent to 45,500 won, and runner-up SK Hynix tumbled 4.20 percent to 72,900 won.

Major pharmaceutical firm Celltrion fell 0.75 percent to 198,000 won, and Samsung BioLogics decreased 0.74 percent to 336,000 won.

Leading chemical firm LG Chem skidded 3.29 percent to 367,000 won, and top steelmaker Posco dropped 2.32 percent to 253,000 won.

Top automaker Hyundai Motor dipped 2.83 percent to 120,000 won, and its auto parts affiliate Hyundai Mobis slid 3.03 percent to 208,000 won. Kia Motors fell 2.03 percent to 33,800 won.

Hyundai Heavy Industries, Korea’s largest shipbuilder, plunged 7.54 percent to 116,500 won, and Samsung Heavy Industries dropped 3.09 percent to 8,470 won.

The Kosdaq fell 16.76 points, or 2.25 percent, to end the session at 727.21. The tech heavy index was dragged down by foreign and institutional selling of shares overnight.

The won traded at 1,134.20 won against the dollar, up 4.10 won from the previous session’s close.

Bond prices, which move inversely to yields, ended higher. The yield on three-year bonds lost 3.0 basis points to 1.77 percent. The yield on 10-year bonds lost 4.6 basis points to 1.89 percent.

BY KIM HE-YU, YONHAP [kim.heyu@joongang.co.kr]