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Stocks off after U.S. fall ahead of Fed meeting

Dec 19,2018
Korean stocks fell Tuesday as investors remained wary over signs of slowing global growth ahead of the U.S. Federal Reserve’s rate-setting meeting. The Korean won strengthened against the U.S. dollar.

The benchmark Kospi dropped 8.98 points, or 0.43 percent, to 2,062.11. Trading volume was moderate at 5.14 trillion won ($4.55 billion).

Investors took to the sidelines after Wall Street plunged to its lowest levels in more than a year on Monday on concerns over a slowdown of the world’s largest economy.

The U.S. Federal Reserve is widely expected to raise interest rates again on Wednesday, which would be the fourth rate hike of the year.

“Major markets, including the United States, are sluggish due to concerns over slowing global economic growth,” said Seo Sang-yong, an analyst at Kiwoom Securities. “The lack of momentum in growth could also affect Korea’s exports, which is a negative factor for the local stock market as well.”

Foreign investors sold a net 170 billion won worth of shares, while retail investors offloaded a net 155 billion won worth of local stocks. Institutions bought a net 314 billion won, moderating the losses.

Tech heavyweights retreated to weigh down the index.

Market bellwether Samsung Electronics lost 0.64 percent to 38,900 won, and chipmaker SK Hynix shed 1.77 percent to 61,100 won.

Mobile carriers were the worst performing companies of the day, with their shares falling an average of 2.6 percent.

SKT, the country’s leading wireless operator, retreated 2.53 percent to 270,000 won, while smaller KT slipped 2.57 percent to 30,300 won. LG U+ dropped 3.12 percent to 17,050 won.

LG Chem sank 3.27 percent to 340,000 won, and leading steelmaker Posco decreased 1.94 percent to 253,000 won.

Kosdaq fell 2.23 points, or 0.34 percent, to 659.67. Semiconductor shares closed weaker, dragged down by a 2.3 percent decline of the tech-heavy U.S. Nasdaq.

Stocks closed lower all across the board, with entertainment and gaming shares falling 1.1 percent and semiconductor shares closing 1.3 percent lower.

The local currency closed at 1,129.6 won against the greenback, down 1.7 won from Monday’s close.

Bonds, which move inversely to yields, closed mixed. The yield on three-year government bonds remained unchanged at 1.80 percent, while the yield on 10-year government bonds lost 2.3 basis points to 1.98 percent.

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