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Local stocks fall, despite brisk foreign buying

June 28,2018
Korean stocks inched down Wednesday as investors took a cautious stance amid persistent worries over trade clashes between the United States and China, despite large foreign buying. The local currency fell to a seven-month low against the U.S. dollar.

The benchmark Kospi declined 8.89 points, or 0.38 percent, to close at 2,342.03. Trade volume was moderate at 6.91 trillion won ($6.18 billion).

“The U.S.-led trade issue has fanned volatility in the Korean market. But recent news that Washington and Beijing have engaged in talks helped investors remain calm,” said Seo Sang-young of Kiwoom Securities. “Also, investors are focusing on shares with upbeat second-quarter earnings projections.”

Foreigners were net buyers for the first time in three sessions, scooping up a net 158.7 billion won worth of local shares. Individuals purchased a net 80.2 billion won while institutions dumped a net 262 billion won.

Korea’s leading steelmaker Posco fell 3.22 percent to 331,000 won, and Dongkuk Steel lost 2.95 percent to 8,560 won. Chemical shares closed weaker, as industry leader LG Chem slumped 3.73 percent to 335,500 won and Hanwha Chemical slid 5.08 percent to 21,500 won.

Korean Air dropped 2.09 percent to 28,050 won, and its budget carrier Jin Air tumbled 5.93 percent to 24,600 won as media reported that Korean Air Chairman Cho Yang-ho will face questioning from prosecutors the next day over allegations of tax evasion.

Cosmetics manufacturers were among the winners, as they have a bright second-quarter outlook. Kolmar Korea, a leading cosmetics and pharmaceutical company, soared 8.85 percent to 82,400 won, and rival Cosmax rose 0.64 percent to 156,500 won.

Electronics companies were also winners. Top cap Samsung Electronics rose 2.02 percent to 47,950 won and No. 2 chipmaker SK Hynix advanced 1.07 percent to 85,200 won.

The secondary Kosdaq lost 4.71 points, or 0.57 percent, to 826.69, dragged down by foreign selling of IT shares. IT shares lost 0.5 percent, while semiconductor shares lost 0.8 percent on the tech-heavy index.

The Korean won finished at 1,117.60 won against the U.S. dollar, up 2.8 won from the previous day’s close. This is the won’s lowest value since Nov. 14 last year, when the won-dollar exchange rate hit 1,118.10 won.

Bond prices, which move inversely to yields, ended sharply higher. The yield on three-year bonds moved down 2.6 basis points to 2.12 percent, and the return on 10-year bonds slipped 4.2 basis points to 2.58 percent.

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