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Foreign investors gain ahead of earnings season

Dec 21,2017
Korean stocks finished lower on Wednesday as foreign investors locked in profits ahead of the fourth-quarter corporate earnings season, analysts said. The local currency gained against the U.S. dollar to reach a 21-day high.

The benchmark Kospi shed 6.16 points, or 0.25 percent, to close at 2,472.37. Trade volume was moderate at 303.4 million shares worth 5.06 trillion won ($4.68 billion) changing hands, with losers far outnumbering gainers 647 to 172.

“Foreigners earned a lot thanks to the rally in the past few months,” said analyst Jung In-ji from Yuanta Securities Korea. “There are no big issues to push up or pull down the index. So the stock market is moving in a tight range.”

He said the Kospi will likely take off when investors turn their focus to fourth-quarter earnings of blue chips like Samsung Electronics and SK Hynix.

Foreigners dumped a net 306.6 billion won worth of South Korean shares, alongside individuals, who also sold a net 339.5 billion won. Institutions purchased 618.1 billion won worth of stocks.

Large-cap shares ended mixed across the board. Market bellwether Samsung Electronics slumped 1.32 percent to 2,544,000 won, and LG Electronics, the country’s second-largest home appliances maker, also retreated 0.48 percent to 103,000 won.

SK Hynix, a leading chipmaker, also dropped 0.12 percent to 80,100 won.

Hyundai Motor, the No. 1 auto company, lost 0.33 percent to 152,500 won, whereas its smaller affiliate Kia Motors rose 0.45 percent to 33,300 won.

Steelmakers remained bullish, with industry leader Posco gaining 1.99 percent to 333,500 won and Dongkuk Steel Mill adding 0.93 percent to 10,850 won.

The secondary Kosdaq closed at 755.27, down 10.91 points, or 1.42 percent from the previous trading day. Sell-offs from foreigners after the drop in the Nasdaq were a major influence.

Pharmaceuticals listed at the top were sluggish. Celltrion lost 1.95 percent to 201,000 won. Affiliate Celltrion Healthcare fell a similar 1.96 percent to 90,000 won.

The local currency closed at 1,080.9 won against the U.S. dollar, up 4 won from the previous session. It marked the highest level since Nov. 29 when it hit 1,076.8 won amid a weakening U.S. dollar trend.

Bond prices, which move inversely to yields, ended mixed. The yield on three-year government bond yields fell one basis point to 2.09 percent, and the return on 10-year government bonds rose two points to 2.47 percent.

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