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Market falls 1 percent as trade tensions escalate

Nov 21,2019
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Stocks dropped more than 1 percent on Wednesday amid fresh worries about a U.S.-China trade deal, following the passage of legislation in the United States Senate supporting the Hong Kong protests. The Korean won fell against the dollar.

The benchmark Kospi was down 27.92 points, or 1.3 percent, to 2,125.32. Trading volume was moderate at 573 million shares worth 5.5 trillion won ($4.7 billion), with losers far outnumbering winners 717 to 134.

On Tuesday, the United States Senate unanimously passed the legislation that centers on protecting human rights in Hong Kong as the Chinese government’s crackdown on a pro-democracy protest movement. In response, China lodged a stern protest against the United States embassy in Beijing on Wednesday.

“The United States senate passed Hong Kong human rights legislation, which brought concerns that U.S.-China relations could worsen,” Lee Won, an analyst at Bookook Securities, said.

Foreigners and institutional investors offloaded a net 334.2 billion won and 99.2 billion won, respectively, while individuals scooped up a net 361 billion won.

Most large-cap shares were bearish.

Samsung Electronics lost 2.8 percent to close at 52,000 won and chipmaker SK Hynix finished 3.05 percent lower at 82,700 won.

Hyundai Motor was down 0.4 percent to reach 124,500 won while its sister company Kia Motors inched up 0.57 percent to 43,750 won. Auto parts maker Hyundai Mobis shed 0.39 percent to 256,000 won.

Chemical firm LG Chem shed 2.52 percent to 309,500 won.

Naver was down 0.59 percent to close at 169,500.

Steelmaker Posco went down 1.33 percent to 222,500 won.

Korea Electric Power, the state-run utility firm, dropped 3.61 percent to 25,350 won.

Refiners traded lower. SK Innovation moved down 2.21 percent to end at 155,500 won and S-Oil, the third-largest oil refiner, lost 1.46 percent to end at 94,700 won.

In contrast, pharmaceutical firm Samsung BioLogics was up 0.13 percent to end at 389,500 won.

The secondary Kosdaq dropped 12.66 points, or 1.91 percent, to close at 649.87.

Won closed at 1,170.1 won against the dollar, up 2.5 won from Tuesday’s close.

Bond prices were traded in positive terrain. The yield on three-year bonds shed 3.7 basis points to 1.451 percent, and the yield on 10-year bonds dropped 3.3 basis points to 1.78 percent.

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