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Kospi closes flat as Pyongyang spooks investors

May 17,2018
Korea’s main bourse closed nearly flat Wednesday following rising concerns over inter-Korean relations, analysts said. The Korean won fell against the U.S. dollar.

The benchmark Kospi edged up 1.28 points, or 0.05 percent, to 2,459.82. Trade volume was high at 9.73 trillion won ($9.02 billion).

Analysts said while investors sought to scoop up undervalued shares, the growth was limited as they also took a wait-and-see stance over the latest developments in the inter-Korean issues.

“The market should pay attention to the North Korean issues, as Pyongyang decided to cancel planned high-level talks with South Korea, citing military drills with the United States,” said Seo Sang-young, a researcher at Kiwoom Securities.

Foreigners bought a net 11.1 billion won, with retail investors offloading a net 174 billion won. Institutions were net buyers at 248.6 billion won.

Market kingpin Samsung Electronics closed 1.32 percent higher at 49,850 won, while No. 2 chipmaker SK Hynix added 2.84 percent to 87,000 won. LG Electronics advanced 0.31 percent to 96,900 won.

Pharmaceutical shares also experienced bullish trading, rising 2.6 percent across sector. Celltrion added 0.19 percent to 268,500 won and Samsung BioLogics jumped 6.56 percent to 414,000 won.

Construction companies, on the other hand, closed weaker. Hyundai Engineering & Construction fell 6.35 percent to 69,300 won while GS Engineering & Construction lost 5.53 percent to 44,450 won. Daelim Industrial shed 5.14 percent to 83,000 won.

No. 1 steelmaker Posco plunged 2.02 percent to 363,000 won, and Hyundai Steel moved down 5.83 percent to 63,000 won.

The secondary Kosdaq dropped 12.65 points, or 1.47 percent, to 850.29. The 1.2 percent drop in the Philadelphia Semiconductor Index and the subsequent offloading of semiconductor shares by foreign investors weighed on the tech-heavy index’s decline.

Foreigners sold 78.5 billion won more shares than they bought. Institutions and individuals were net buyers, each purchasing net 4.0 billion won and 75.0 billion won.

By sector, construction and metal shares suffered heavy losses, each plunging 8 and 7 percent. Semiconductors shed 1.9 percent across sector.

The local currency closed at 1,077.60 won against the U.S. dollar, up 3.8 won from the previous session.

Bond prices ended higher. The yield on three-year bonds fell 2.7 basis points to 2.29 percent, and the return on 10-year government bonds shed 2.0 basis points to 2.79 percent.

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