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Foreign selling causes Seoul stocks to slump

June 29,2018
Korean stocks slumped Thursday amid lingering trade woes sparked by foreign selling.

The local currency dropped sharply to an eight-month low against the U.S. dollar.

The benchmark Kospi dropped 27.79 points, or 1.19 percent, to close at 2,314.24. Trade volume was slim at 5.62 trillion won ($5 billion).

Foreigners offloaded a net 259.4 billion won worth of local shares. Individuals bought a net 113.1 billion won while institutions picked up a net 111.4 billion won.

“As uncertainty over global trade continues,” said Kim Sung-hwan, an analyst at Bookook Securities, “foreign investors pulled their money out of the Korean market. As they reduced their holdings of big-cap shares first, the index lost ground.”

He added that the rapid appreciation of the U.S. greenback also encouraged foreigners to sell Korean stocks.

Most shares ended bearish across the board.

Top cap Samsung Electronics surrendered 2.4 percent to 46,800 won, and chipmaker SK Hynix moved down 2 percent to 83,500 won.

Despite the ongoing inter-Korean talks on plans to connect roads over the border, construction shares remained weak. GS Engineering & Construction diminished 1.95 percent to 45,250 won, and Hyundai Engineering & Construction sank 4.2 percent to 54,700 won.

Game developers also lost. Leading game maker NCSoft retreated 4.89 percent to 360,000 won, and rival Netmarble fell 2.53 percent to 154,000 won.

Korean Air, Korea’s No. 1 air carrier, tumbled 3.57 percent to 27,050 won after the company’s Chairman Cho Yang-ho was questioned over a range of tax evasion and embezzlement charges.

The secondary Kosdaq also lost 16.49 points, or 1.99 percent, to 810.20, closing lower for the third consecutive session.

The tech-heavy index was dragged down by the 2.5 percent drop in the Philadelphia Semiconductor Index, as well as heavy institutional selling.

Semiconductor shares fell 2.1 percent across sector.

The Korean won finished at 1,124.20 won against the U.S. dollar, up 6.60 won from the previous day’s close.

It was the lowest currency value since Oct. 30 last year, when the won-dollar rate hit 1,124.60 won.

Bond prices, which move inversely to yields, ended higher. The yield on three-year bonds fell 0.7 basis points to 2.12 percent, and the return on 10-year bonds fell 1.8 basis points to 2.56 percent.

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