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Market drops over fears of global slowdown

Mar 09,2019
Korea’s main bourse closed sharply lower Friday as renewed concerns over the global economic slowdown prompted investors to shun risk, analysts said. The Korean won depreciated against the dollar.

The benchmark Kospi shed 28.35 points, or 1.31 percent, to finish at 2,137.44, which is the lowest since Jan. 23, when the figure came to 2,127.78. Trading volume was moderate at 308.82 million shares worth 4.44 trillion won ($3.91 billion).

The index opened lower, tracking Wall Street losses, and moved further down to extend its losing run for a sixth-straight session.

Individuals bought a net 293.3 billion won worth of stocks and foreign investors sold a net 175.1 billion won worth of shares. Institutions sold a net 126.2 billion won of stocks.

“Fresh concerns over global economic growth appear to dampen investor sentiment, while no tangible progress has been made regarding trade frictions between the United States and China,” said Seo Sang-young, an analyst at Kiwoom Securities.

The European Central Bank on Thursday slashed its growth and inflation forecasts while deciding to defer interest rate hikes to next year and offer banks a new round of cheap loans, citing continued weakness and pervasive uncertainty.

The news that China’s exports plummeted more than 20 percent in February also stoked fears over slowing global demand, Seo noted.

Losses were wide and deep across the board on the Seoul bourse, with tech blue chips coming under heavy downward pressure. Market bellwether Samsung Electronics sank 1.46 percent to 43,800 won, and chip giant SK Hynix dropped 2.06 percent to 66,700 won. Leading chemical firm LG Chem skidded 0.41 percent to 364,500 won, and top carmaker Hyundai Motor tumbled 4.38 percent to 120,000 won.

Big-cap bio firms also lost ground. Major pharmaceutical firm Celltrion fell 0.48 percent to 206,000 won, and Samsung BioLogics decreased 0.4 percent to 373,500 won.

The Kosdaq fell 0.86 points, or 0.12 percent, to end the session at 735.97. The tech-heavy index was dragged down by foreign selling after continuing to fluctuate due to concerns over the slowdown of the global economy and fall in the Nasdaq Composite Index overnight. The Korean won was trading at 1,136.20 won against the dollar, up 7.20 won up from the previous session.

Bond prices, which move inversely to yields, ended higher. The yield on three-year bonds lost 1.5 basis points to 1.80 percent. The yield on 10-year bonds lost 3.2 basis points to 1.97 percent.

BY KIM HE-YU, YONHAP [kim.heyu@joongang.co.kr]