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U.S.-China trade war continues to hit Kospi

May 24,2019
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Local stocks closed lower Thursday as worries intensified over the trade war between the United States and China. The won rose against the dollar.

The benchmark Kospi fell 5.27 points, or 0.26 percent, to close at 2,059.59. Trade volume was moderate at 500 million shares worth 4.74 trillion won ($3.98 billion), with losers outnumbering gainers 624 to 218.

The local stock market opened lower, tracking losses on Wall Street overnight.

Market sentiment deteriorated as the United States and China appear to be preparing for a prolonged trade feud, dashing hopes of a deal by next month, when the Group of 20 summit will be held in Osaka, Japan.

U.S. Treasury Secretary Steven Mnuchin has said Washington is reviewing measures to ease burdens for U.S. companies if U.S. President Donald Trump raises tariffs on $300 billion in Chinese imports as planned.

“Stocks related to the U.S.-China trade dispute were hit hard as trade fears intensified,” said Lee Young-gon, a researcher at Hana Financial Investment.

Yet foreign investors scooped up a net 85.1 billion won worth of local stocks, extending their buying binge to a third consecutive session. Institutions offloaded a net 100.9 billion won, while individuals net purchased 15.5 billion won worth of local shares.

Samsung Electronics rose 0.8 percent to end at 43,850 won, while SK Hynix declined 1.31 percent to 68,000 won. LG Electronics jumped 3.01 percent to 75,300 won.

Leading steelmaker Posco shed 1.07 percent to 231,000 won.

Auto shares ended mixed. No. 1 automaker Hyundai Motor gained 0.39 percent to 127,500 won, but its smaller affiliate Kia Motors dipped 0.85 percent to 40,850 won.

Bio shares ended lower, with Celltrion falling 2.17 percent to 180,500 won and Samsung BioLogics dipping 1.64 percent to 299,000 won.

The secondary Kosdaq fell 10.04 points, or 1.42 percent, to close at 696.89. The index crashed below the 700 line for the first time in four months as institutions and foreign investors mass offloaded local stocks after seeing the Philadelphia Semiconductor Index crash 2.1 percent overnight.

The local currency closed at 1,189.20 won against the dollar, down 3.6 won from the previous session’s close.

Bond prices, which move inversely to yields, ended higher. The yield on three-year bonds fell 1.9 basis points to 1.648 percent, and the return on 10-year bonds went down 2.0 basis points to 1.808 percent.

BY KO JUN-TAE, YONHAP [ko.juntae@joongang.co.kr]