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Investors remain tepid ahead of Fed meeting

Sept 21,2017
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Seoul’s main bourse retreated slightly on Wednesday as foreign investors offloaded Korean shares in anxious anticipation of the U.S. Federal Reserve’s policy meeting.

The benchmark index, the Kospi, fell 3.85 points, or 0.16 percent, to close at 2,412.20, marking a second consecutive session of decline. Foreign investors sold 188.2 billion won ($166.7 million) worth of stock.

“A wait-and-see stance took hold among investors due to the FOMC meeting and geopolitical tensions after U.S. President Donald Trump’s speech at the United Nations,” said Kim Byong-yeon, an analyst at NH Investment & Securities.

In an address to the UN General Assembly in New York on Tuesday, Trump said the United States would “have no choice but to totally destroy North Korea” if the reclusive regime continues its nuclear threats.

Institutional investors, on the other hand, scooped up 57.7 billion won in Korean shares, and retail investors bought 85.8 billion won worth of stock. By sector, electricity and gas fell 1.8 percent, and chemical shares tumbled 1.3 percent

Market heavyweight Samsung Electronics managed to close up 0.19 percent to end at 2,611,000 won. Rival chipmaker SK Hynix climbed 1.89 percent to 80,700 won.

Leading steelmaker Posco gained 0.31 percent to end the day at 325,000 won, internet giant Naver jumped 1.69 percent to 783,000 won and mobile game developer Netmarble Games rose 1.29 percent to 156,500 won.

Auto shares were also in positive terrain. Hyundai Motor, the nation’s largest automaker, rose 1.43 percent to 142,000 won, and its smaller affiliate Kia Motors went up 1.13 percent to 31,350 won. Auto parts supplier Hyundai Mobis nudged up 0.69 percent to 219,000 won.

Petrochemical shares were mixed across the board. Refiner SK Innovation inched up 0.79 percent to 191,000 won, while LG Chem, Korea’s largest battery maker, fell 2.14 percent to 388,500 won. Lotte Chemical slipped 2.18 percent to 381,000 won, and S-Oil dropped 0.41 percent to 120,000 won.

Samsung SDI, the battery-making affiliate of Samsung Electronics, retreated 1.79 percent to 219,000 won.

The secondary index, the Kosdaq, fell below the 670 level for the first time in four trading days to close at 668.05, down 6.43 points or 0.95 percent from the previous session.

The local currency closed at 1,128.30 won against the U.S. dollar, up 3.00 won from the previous close.

Returns on three-year government bonds remained fixed at 1.78 percent, and yields on 10-year bonds fell one basis point to 2.28 percent.


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