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Local shares drop as foreigners sell heavily

Apr 24,2018
Korean stocks closed lower Monday as foreign buyers sold heavily to offset individual buying amid worries over a U.S. interest rate rise. The Korean won depreciated against the U.S. dollar.

The benchmark Kospi dropped 2.22 points, or 0.09 percent, to close at 2,474.11. Trading volume was heavy at 9.1 trillion won ($8.44 billion).

Foreigners offloaded a net 303.7 billion won worth of shares on the main exchange, while individual investors scooped up a net 303 billion won. Institutions also bought a net 1.12 billion won.

The main index opened slightly lower, tracking losses on Wall Street. U.S. stocks declined on Friday, with the Dow Jones industrial average falling 0.82 percent and the broad-based S&P 500 decreasing 0.85 percent.

“The Kospi showed weakness due to the selling sprees by foreigners and institutions, and investor sentiment shrank due to the prospect of the U.S. rate hikes,” said Lee Yeong-gon, an analyst at Hana Financial Investment. The yield on 10-year U.S. treasury bonds jumped to 2.96 percent on Friday, the highest in over four years.

Large caps on the main bourse had a mixed day.

Pharmaceuticals led the losses, falling 5.8 percent across the sector, as investors worried that their shares were overvalued.

Tech shares also saw mixed results. Top cap Samsung Electronics added 0.54 percent to end at 2,595,000 won. SK Hynix, a major chipmaker, was unchanged at 84,400 won.

Shares of pharmaceutical companies lost ground with Samsung BioLogics, Samsung’s health care unit, shedding 6.52 percent to end at 473,000 won.

Celltrion also lost 6.88 percent to end at 250,500 won.

The country’s leading automaker Hyundai Motor surrendered 0.31 percent to 159,500 won while its sister company Kia Motors was unchanged at 31,350 won.

The secondary Kosdaq fell 10.15 points, or 1.14 percent, to 879.02. Foreign investors sold bio shares en masse, following a 0.84 percent fall in the U.S. Nasdaq Biotech Index.

Foreigners were net sellers, offloading a net 124.0 billion won. Institutions and individuals each bought net 58.3 billion won and 55.9 billion won.

The local currency closed at 1,069 won against the U.S. dollar, up 1.7 won from the last trading session.

Bond prices, which move inversely to yields, ended lower.

The yield on three-year bonds added 3.5 basis points to 2.24 percent, and the return on 10-year government bonds was up 5.4 basis points to 2.73 percent.

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