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Stocks fall on U.S. political uncertainty

May 19,2017
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Seoul’s main bourse retreated Thursday as investors turned to safer bets in the midst of political uncertainty in the United States.

The benchmark Kospi fell for the second consecutive trading day, down 6.26 points, or 0.27 percent, to close at 2,286.82 on Thursday.

Institutions and retail investors offloaded local shares worth 60.7 billion won ($53.9 million) and 19 billion won. Foreign investors net bought 22.7 billion won worth.

“Investors are beginning to worry that measures including a tax cut pledged by Trump may be held off, which triggered selling in the stock market,” said Seo Sang-young, an analyst at Kiwoom Securities Co.

“Having said that, we need to be reminded of the fact that any outcome of political uncertainty in the past barely changed the course of market trends.”

Market heavyweight Samsung Electronics inched down 0.86 percent on Thursday to close at 2,297,000 won. Portal giant Naver moved down 0.96 percent to 824,000 won and steel manufacturer Posco slipped 0.18 percent to 270,000 won.

Amore Pacific inched down 0.7 percent to 355,000 won and LG Chem, a leading battery maker, fell 1.23 percent to 280,500 won.

Insurance companies also were in negative terrain. Samsung Life Insurance declined 1.26 percent to 117,500 won and Samsung Fire & Marine Insurance was down 1.25 percent to 276,000 won.

On the contrary, chipmaker SK Hynix gained 1.83 percent to 55,700 won. Hyundai Motor jumped 4.1 percent to 165,000 won as its sister company Kia rose 2.83 percent to 38,200 won. Hyundai Mobis rose 2.97 percent to 260,000 won. The auto companies’ shares were boosted by expectations that it may soon overhaul its management structure.

The secondary Kosdaq retreated, falling 1.89 points, or 0.3 percent, from the previous day to close at 638.12.

The local currency ended at 1,124.50 won against the greenback, down 6.2 won.

Bond prices, which move inversely to yields, closed almost flat. The yield on three-year Treasurys inched down 0.1 basis point to 1.683 percent and the return on the benchmark five-year government bonds also slid 0.1 basis point to 1.9 percent.


BY CHOI HYUNG-JO, YONHAP [choi.hyungjo@joongang.co.kr]