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Stocks drop for third day on trade war concerns

May 28,2019
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Stocks closed lower Monday, extending their losing streak to a third day, as big-cap tech stocks, such as Samsung Electronics, came under selling pressure amid the trade war between the United States and China. The won rose sharply against the dollar.

The benchmark Kospi lost 1.10 points, or 0.05 percent, to close at 2,044.21. Trade volume was low at 342 million shares worth 3.3 trillion won ($2.7 billion), with losers outnumbering gainers 491 to 342.

The stock market opened higher in the morning, apparently tracking gains on Wall Street last week, but finished lower after moving in and out of positive terrain.

The U.S. stocks advanced on improved market sentiment on Friday after U.S. President Donald Trump hinted at a positive turnaround in a trade row with Beijing. Trump added that the ban on Chinese tech giant Huawei could be solved if China agrees to a trade agreement.

Foreigners offloaded 194 billion won, while institutional and retail investors bought a net 170 billion won and 24 billion won, respectively.

“With the U.S.-China trade dispute continuing, political uncertainties caused by British Prime Minister Theresa May’s resignation also soured investor sentiment,” said Gwak Hyun-su, an analyst at Shinhan Investment.

Large-cap shares traded mixed across the board.

Samsung Electronics was down 0.12 percent to 42,650 won, while No. 2 chipmaker SK Hynix dipped 1.04 percent to 66,900 won. Naver, the operator of the country’s top internet portal, shed 2.64 percent to 110,500 won.

In contrast, top automaker Hyundai Motor rose 3.45 percent to 135,000 won, and its smaller affiliate, Kia Motors, added 1.34 percent to 41,650 won. Auto parts maker Hyundai Mobis gained 2.34 percent to 219,000 won.

Shares of major online gaming companies were also mixed after the World Health Organization (WHO) classified excessive gaming as an illness. Netmarble lost 1.32 percent, but NCSoft rose 1.05 percent.

The secondary Kosdaq went down 0.36 points, or 0.05 percent, to close at 689.67. The index ended lower as foreign investors net offloaded local stocks after seeing the Philadelphia Semiconductor Index finish south at the end of last week.

The local currency was trading at 1,184.50 won against the dollar, down 3.9 won from the previous session’s close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year bonds rose 0.9 basis points to 1.652 percent, and the return on 10-year bonds advanced 0.5 basis points to 1.797 percent.

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