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Kospi falls as investors wait for news from Fed

Feb 28,2018
Korean stocks ended lower Tuesday with investors jittery over the pace of rate increases in the United States. The Korean won appreciated against the U.S. dollar.

The benchmark Kospi lost 1.51 points, or 0.06 percent, to 2,456.14.

Institutional investors purchased a net 209.4 billion won ($195 million) worth of stocks, while foreigners bought 0.4 billion won worth of shares with individual investors shedding 188 billion won.

Han Ji-young, an analyst at Cape Investment & Securities, said investors’ concern about the future of the U.S. monetary policy weighed on the main index.

In Washington, U.S. Federal Reserve Chair Jerome Powell is set to testify before Congress on Tuesday, a debut that will be closely watched by investors for any hint of the pace of rate increases.

The January minutes, released last week by the Fed on its website, said “a majority of participants noted that a stronger outlook for economic growth raised the likelihood that further gradual policy firming would be appropriate.”

On Tuesday, Korea’s central bank kept its key rate at 1.50 percent, maintaining its wait-and-see stance as Asia’s fourth-largest economy.

Large-cap stocks had a mixed day Tuesday.

Chipmaker SK Hynix advanced 1.55 percent to 78,700 won, and leading steelmaker Posco was up 2.44 percent to 378,500 won. Market bellwether Samsung Electronics remained flat at 2,369,000 won.

Among decliners, KB Financial, a major banking group, fell 0.16 percent to 64,000 won, and Naver, the operator of Korea’s top Internet portal, was down 0.74 percent to 804,000 won.

The secondary Kosdaq fell 0.42 points, or 0.05 percent, to 874.01. The session started off upwards, influenced by the U.S. Nasdaq rising for the second consecutive day, but ended in negative terrain as foreigners offloaded on bio shares.

Pharmaceuticals suffered 0.9 percent in losses. Medytox shed 1.73 percent to 625,000 won while Hugel dropped 0.47 percent to 576,600 won. Celltrion Healthcare, a Celltrion subsidiary, saw a modest gain of 1.64 percent to 130,000 won.

The local currency closed at 1,071.30 won against the U.S. dollar, down 2.10 won from the previous session’s close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year bonds fell 0.5 basis points to 2.26 percent, and the return on 10-year government bonds was down 3.3 basis points to 2.73 percent.

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