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Stocks drop slightly as trade optimism wanes

Sept 04,2019
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Stocks snapped a two-day winning streak to close lower Tuesday on weaker-than-expected economic growth and uncertainties over trade talks between the United States and China. The won fell against the dollar.

The benchmark Kospi decreased 3.5 points, or 0.18 percent, to close at 1,965.69. Trade volume was moderate at 331.1 million shares worth 3.8 trillion won ($3.1 billion), with gainers outnumbering losers 439 to 364.

The index opened a tad lower as the economy grew at a slower than expected rate of 1 percent in the second quarter from three months earlier, and inflation in Asia’s fourth-largest economy hit an all-time low in August.

Analysts said reports that negotiators of the United States and China failed to agree to a trade talk scheduled for this month also sapped investors’ appetite for risk.

“As the local stock market was boosted by hopes for trade talks between the United States and China, the reports that the two sides couldn’t agree on a meeting schedule is negative for investor sentiment,” Seo Sang-young, an analyst at Kiwoom Securities, said.

Foreigners dumped a net 303.6 billion won worth of shares to weigh on the overall market.

Institutions and individuals sold a net 248 billion won and 41 billion won, respectively.

Tech shares closed lower.

Samsung Electronics fell 1.26 percent to 43,250 won, and SK Hynix shed 0.77 percent to 77,000 won.

Hyundai Motor lost 1.91 percent to 128,500 won although its union approved this year’s wage and collective bargaining agreement without a strike, and its parts maker, Hyundai Mobis, retreated 1.39 percent to 249,000 won.

In contrast, cosmetics shares rallied, helped by China’s upbeat manufacturing activity data released the previous day.

AmorePacific, the nation’s leading cosmetics brand, jumped 7.6 percent to 141,500 won, and LG Household & Health Care advanced 4.77 percent to 1,231,000 won.

Chemical shares rose slightly. LG Chem rose 0.16 percent to 322,000 won.

The secondary Kosdaq gained 0.21 points, or 0.03 percent, to close at 620.02

The local currency closed at 1,215.6 won against the dollar, up 4.8 won from Monday’s close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 0.5 basis point to 1.228 percent, but the return on the benchmark ten-year government bond increased 0.7 basis point to 1.290 percent.

BY KIM BYUNG-WOOK, YONHAP [kim.byungwook@joongang.co.kr]