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Stocks drop as North launches missile

July 05,2017
Seoul's main bourse finished sharply lower Tuesday, as investors remained wary of rising geopolitical tension stemming from North Korea’s missile launch, analysts said. The Korean won rose against the U.S. dollar.

After a choppy session, the benchmark Kospi shed 13.96 points, or 0.58 percent, to close at 2,380.52 as uncertainties surrounding North Korea caused investors to cash in recent gains.

Trade volume was moderate at 380 million shares worth 4.75 trillion won ($4.13 billion), with losers outnumbering gainers 582 to 216.

The local stock market opened flat despite overnight gains on Wall Street, as investors took to the sidelines ahead of Samsung’s second-quarter earnings guidance release.

In the afternoon session, the market sentiment was dampened after Pyongyang said it would make an ‘important announcement’ at 3:30 p.m.

After the market closed, the North claimed it successfully test-fired an intercontinental ballistic missile.

Analysts said the Kospi has risen for the seventh consecutive month, which means that a profit-taking stance may take hold among investors.

Samsung Electronics, the top market cap, fell 0.47 percent to end at 2.35 million won, and SK Hynix, a major chipmaker, dropped 0.75 percent to 65,800 won on profit-taking.

Posco, the top steelmaker, declined 1.36 percent to end at 291,000 won, and SK Innovation fell 0.62 percent to end at 160,000 won.

Hyundai Motor, the No. 1 automaker, declined 3.06 percent to end at 158,500 won, and its smaller affiliate Kia Motors slid 1.81 percent to 38,000 won.

In contrast, utility and banking stocks remained bullish.

The state-run Korea Electric Power Corp. gained 1.47 percent to finish at 41,300 won.

Shinhan Financial Group advanced 0.71 percent to 49,900 won, with KB Financial remaining flat at 57,800 won.

The secondary Kosdaq closed down 4.78 points, or 0.72 percent from the previous session to close at 656.19.

The local currency closed at 1,150.60 won against the U.S. dollar, up 3.7 won from the previous session’s close.

BY YONHAP, SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]