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Ahead of Q1 earnings, market drops slightly

Apr 03,2018
Korean stocks closed slightly lower Monday, as investors took a wait-and-see stance ahead of the release of first-quarter earnings.

The rise in retail shares kept stocks from falling further as the outlook on Chinese consumption brightened following optimistic remarks by a senior Chinese official during a visit to Korea. The Korean won appreciated against the U.S. dollar.

The benchmark Kospi lost 1.69 points, or 0.07 percent, to close at 2,444.16. Trade volume was moderate at 6.6 trillion won ($6.25 billion).

“Strong economic data [released over the weekend] boosted sentiment at first, but mixed expectations on Samsung’s earnings and woes over tightened regulations dragged down the market,” said Seo Sang-young, an analyst at Kiwoom Securities.

Earlier in the day, Kim Ki-sik, a vocal critic of chaebol ownership of financial firms, was sworn in to head Korea’s financial watchdog, the Financial Supervisory Service.

Individuals bought a net 74.3 billion won worth of local stocks, while foreign and institutional investors dumped a net 27.1 billion won and 21.8 billion won each.

Samsung Electronics, the top market cap, shed 1.38 percent to close at 2,427,000 won, while SK Hynix, a major chipmaker, stayed flat at 81,300 won.

KB Financial Group fell 1.98 percent to 59,500 won, and Shinhan Financial Group retreated 0.66 percent to close at 45,400 won.

Retail shares were among the winners amid growing hopes for the end of China’s economic retribution against Korean firms for the installation of a U.S antimissile system. During a meeting with President Moon Jae-in in Seoul on Friday, Chinese State Councilor Yang Jiechi said there will be “tangible results in the near future.”

Lotte Shopping jumped 6.61 percent to finish at 250,000 won and Shinsegae, another retail giant, advanced 7.27 percent to close at 383,500 won.

Cosmetics makers also gained. Amorepacific soared 5.05 percent to end at 333,000 won, and LG Household & Healthcare added 3.56 percent to 1,251,000 won.

The secondary Kosdaq also dropped 3.29 points, or 0.38 percent, to 867.80. Institutions offloaded a net 14.2 billion won and foreigners sold a net 38.5 billion won. The local currency closed at 1,056.60 won against the U.S. dollar, down 6.9 won from the previous session.

Bond prices, which move inversely to yields, ended lower. The yield on three-year bonds rose 0.9 basis points to 2.23 percent, and the return on 10-year government bonds increased 1.9 basis points to 2.64 percent.

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