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Kospi flat as all eyes turn to Singapore summit

June 13,2018
Korean shares changed little on Tuesday as investors moved sideways, awaiting the full results of the high-stakes summit between U.S. President Donald Trump and North Korean leader Kim Jong-un. The Korean won depreciated against the U.S. dollar.

The benchmark Kospi shed 1.32 points, or 0.05 percent, to finish at 2,468.83. Trade volume was moderate at 9.40 trillion won ($8.72 billion).

Analysts said investors appeared to lock in profits from recent gains, while closely monitoring the developments of the historic showdown between Trump and Kim, which started at 10 a.m. (Seoul time) in Singapore.

After holding rounds of talks, the leaders signed an agreement and expressed satisfaction over the pact.

“Hopes and optimism over the summit have already been reflected in the index over the past several sessions, and investors will need some time to analyze the effects of the latest deal,” said Choi Chang-gyu, an analyst at NH Investment & Securities.

“As other key market-moving events are planned this week, such a wait-and-see posture will continue for the time being,” said another NH expert, Kim Byung-yeon.

On Wednesday, the U.S. central bank will hold a two-day policy meeting, during which it is widely expected to raise interest rates by a quarter of a percentage point from the current range of 1.5 percent to 1.75 percent.

Offshore investors dumped local shares worth 122.7 billion won while retailers offloaded a net 12.1 billion won. Institutions picked up a net 121.6 billion won.

Steel and construction, which had seen bullish trade on the back of heightened hopes for inter-Korean economic cooperation projects, ended lower.

Posco skidded 1.61 percent to 366,000 won, and Hyundai Steel fell 2.72 percent to 60,700 won. Train manufacturer Hyundai Rotem dived 4.69 percent to 36,600 won.

Tech shares also moved down, with market bellwether Samsung Electronics tumbling 1 percent to 49,400 won and chip giant SK Hynix decreasing 0.9 percent to 88,400 won.

The tech heavy Kosdaq also lost 1.51 points, or 0.17 percent, to 875.04, dragged down by losses in shares related to economic cooperation with North Korea.

The Korean won closed at 1,077.20 won against the U.S. dollar, up 2.0 won from the previous session’s close. The market will be closed Wednesday for local elections.

Bond prices ended on a mixed note. The yield on three-year bonds remained unchanged at 2.22 percent, and the return on 10-year government bonds shed 1.1 basis points to 2.72 percent.

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