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Institutional buying helps lift Seoul stocks

Feb 27,2018
Korea’s main bourse ended higher on Monday, helped by increased buying by institutions. The Korean won appreciated against the U.S. dollar.

The benchmark Kospi gained 6.13 points, or 0.25 percent, to 2,457.65. The increase came despite market uncertainty before the Bank of Korea’s announcement on benchmark interest rates and the U.S. Federal Reserve Chairman’s semi-annual testimony on monetary policy to Congress scheduled for this week.

Institutional investors purchased a net 292 billion won ($272 million) worth of stocks, giving a boost to the main index. Foreigners and individuals were net sellers, offloading 150.6 billion and 138.4 billion won each.

Seo Sang-young, an analyst at Kiwoom Securities, said investor sentiment improved after the Federal Reserve suggested gradual rate rises.

The Federal Reserve said in a report submitted to Congress on Feb. 23 that it expects that “the ongoing strength in the economy will warrant further gradual increases in the federal funds rate.”

Pharmaceuticals and steel makers led the gains. Celltrion, a leading bio firm, climbed 2.67 percent to 326,500 won. Samsung’s biopharmaceutical manufacturing arm Samsung BioLogics also gained 2 percent to 459,000 won. Hyundai Steel rose 1.32 percent to 53,600 won while Posco increased 1.93 percent to 369,500 won.

Large-cap stocks saw mixed trade.

Market bellwether Samsung Electronics rose 0.34 percent to 2,369,000 won, and top carmaker Hyundai Motor was up 1.26 percent to 161,000 won.

Among decliners, KB Financial, a major banking group, was down 0.93 percent to 64,100 won, and Naver, the operator of Korea’s top internet portal, fell 2.29 percent to 810,000 won.

The secondary Kosdaq declined 0.35 points, or 0.04 percent, to 874.43. Though the session began moving upwards, riding on the high of U.S. Nasdaq’s 1.8 percent rise, the tech-heavy market ended in negative terrain as individuals offloaded en masse on tech shares to reap profits from recent gains.

Posco ICT, Posco’s IT service affiliate, plummeted 8.45 percent to 7,800 won. Samsung SDS, the Samsung counterpart, dropped 0.99 percent to 249,000 won.

The local currency closed at 1,073.40 won against the U.S. dollar, down 5.60 won from the previous session’s close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year bonds fell 2.2 basis points to 2.26 percent, and the return on 10-year government bonds was down 2.9 basis points to 2.76 percent.

BY KIM EUN-JIN, YONHAP [kim.eunjin1@joongang.co.kr]