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Markets tumble after Trump nixes summit

May 26,2018
Seoul shares ended lower Friday, as U.S. President Donald Trump’s sudden cancellation of the U.S.-North Korea summit weighed on investor sentiment despite gains by technology stocks.

The benchmark Kospi index fell 5.21 points, or 0.21 percent, to 2,460.8. Trade volume was moderate as 643.14 million shares worth 8.894 trillion won ($8.3 billion) changed hands, with declining shares outnumbering gainers 691 to 148.

Individuals dumped a net 479.1 billion won worth of stocks, offsetting net buying of 461.1 billion won by institutions and foreigners.

“Stocks related to inter-Korean economic cooperation fell sharply due to the summit cancellation, but foreign purchases of technology stocks kept the index from falling further,” said Daishin Securities analyst Park Choon-young,

In particular, construction stocks led the declines. Hyundai Engineering & Construction plunged 9.78 percent to 60,900 won, Kumho Engineering & Construction declined 12.09 percent to 12,000 won and Samsung Engineering fell 2.12 percent to 18,450 won.

Auto stocks declined further following reports that the U.S. government is considering imposing 25 percent tariffs on imported vehicles. Korea’s top carmaker Hyundai Motor fell 0.71 percent to 139,000 won and Kia Motors shed 1.38 percent, closing at 32,250 won. Car components manufacturer Hyundai Mobis slipped 1.88 percent to 234,500 won.

Foreign buying of technology shares helped offset the declines in construction and automotive shares. Market bellwether Samsung Electronics jumped 2.53 percent to 52,700 won and No. 2 chipmaker SK Hynix climbed 0.63 percent to 95,200 won.

Top pharmaceutical companies also saw gains: Celltrion advanced 3.97 percent to 275,000 won and Samsung BioLogics rose 2.99 percent to 430,500 won.

On Thursday, U.S. President Donald Trump announced he was calling off his meeting with North Korean leader Kim Jong-un scheduled for June. The cancellation came just hours after the North demolished its Punggye-ri nuclear test site.

The secondary Kosdaq index also fell on Friday to close at 868.35, down 4.97 points, or 0.57 percent, from the previous day. Individuals sold a net 137.3 billion won, offsetting a combined net purchase of 139.5 billion won from foreign and institutional investors. The index’s top pharmaceutical companies remained strong: Celltrion Healthcare jumped 7.17 percent to 98,600 won. SillaJen added 1.99 percent to 82,000 won.

The local currency closed at 1,078 won against the U.S. dollar, down 1.60 won from the previous session.

BY SONG KYOUNG-SON, YONHAP [song.kyoungson@joongang.co.kr]