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Seoul stocks drop as investors fear steel tariffs

Mar 03,2018
Korea’s main bourse ended lower Friday on increased selling by foreign and institutional investors as they were spooked by looming U.S. steel tariffs. The won appreciated against the dollar.

The benchmark Kospi dropped 25.2 points, or 1.04 percent, to 2,402.16.

Institutional and foreign investors sold a combined net of 540 billion won ($500 million) worth of stocks, weighing on the main index.

Park Chun-young, an analyst at Daishin Securities, said investors’ sentiment worsened after U.S. President Donald Trump unveiled a plan to impose a 25 percent tariff on steel imports next week.

Earlier in February, the U.S. Department of Commerce recommended three alternative remedies on steel ? a global tariff of at least 24 percent on all steel imports from all countries, a tariff of at least 53 percent on all steel imports from 12 countries, including Korea, with a quota on imports from all other countries, or a quota for all countries equal to 63 percent of their respective 2017 steel exports to the United States.

“The U.S. market fell on concern that Trump’s policy may backfire, which in turn weighed on the main index in Korea,” said Han Ji-young, an analyst at Cape Investment & Securities.

The Dow Jones industrial average lost 1.68 percent, with the Nasdaq composite index declining 1.27 percent.

Large-cap stocks were mixed across the board.

Market bellwether Samsung Electronics dropped the most, shedding 2.21 percent to 2,301,000 won. Top carmaker Hyundai Motor fell 3.41 percent to 156,000 won, and leading steelmaker Posco was down 3.6 percent to 348,500 won. Among gainers, chipmaker SK Hynix advanced 0.78 percent to 77,400 won, and Celltrion, a major biotech firm, was up 5.38 percent to 372,000 won.

The secondary Kosdaq gained 3.17 points, or 0.37 percent, to 860.23.

Foreigners, who bought a net 91.5 billion won, helped the tech-heavy market land in positive terrain after four days of consecutive decline. Individuals and institutions were net sellers, offloading 67.9 billion won and 25.3 billion won each.

The local currency closed at 1,080.30 won against the U.S. dollar, down 2.5 won from the previous session’s close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year bonds gained 2.4 basis points to rise to 2.3 percent, and the return on 10-year government bonds added 0.5 basis points to 2.74 percent.

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