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BOK growth estimate cut hurts Seoul stocks

Apr 19,2019
Stocks dropped sharply on Thursday as investors bit the bullet of the central bank’s growth estimate cut, analysts said. The won fell against the dollar.

The benchmark Kospi plunged 32.12 points, or 1.43 percent, to close at 2,213.77. Trading volume was moderate at 508 million shares worth 5.94 trillion won ($5.22 billion), with losers far outnumbering gainers 672 to 172. It marked the sharpest decline since the 1.92-percent drop posted on March 25.

Foreigners offloaded a net 150.9 billion won, while retail investors scooped up a net 291.5 billion won. Institutions sold a net 151.8 billion won.

Analysts said market sentiment turned sour after the Bank of Korea trimmed its growth projection for the year to 2.5 percent from the earlier 2.6 percent, while freezing its key rate at current 1.75 percent for April. The bank’s chief ruled out the possibility of a rate cut in the near future.

Investors took a breather after the market closed higher for the longest period in 35 years earlier this week, with the overnight losses on Wall Street also hurting their sentiment, analysts said.

“The decision to maintain the monetary easing stance weighed down the market as well,” said Seo Sang-young, a researcher at Kiwoom Securities.

Samsung Electronics slipped 3.08 percent to 45,600 won following reports about alleged defects of the Galaxy Fold. No. 2 chipmaker SK Hynix lost 1.25 percent to 79,200 won.

Pharmaceutical firms closed bearish, with Celltrion falling 2.4 percent to 203,500 won and Hanmi Pharmaceutical losing 2.44 percent to 360,000 won. Samsung BioLogics decreased 1.28 percent to 425,000 won.

Top air carrier Korean Air fell 1.11 percent to 35,500 won, while its smaller rival Asiana Airlines advanced 2.95 percent to 7,330 won.

Logistics firms were mixed, with Hyundai Glovis climbing 3.17 percent to 146,500 won while CJ Korea Express decreased 1.83 percent at 160,500 won.

In contrast, automakers were bright spots. Industry leader Hyundai Motor closed 2.29 percent higher to 134,000 won, and Kia Motors added 0.59 percent to 42,550 won. Auto parts maker Hyundai Mobis increased 1.53 percent to 233,000 won.

The secondary Kosdaq fell 13.37 points, or 1.74 percent, to close at 753.52.

Bond prices ended higher. The yield on three-year bonds lost 3.7 basis points to 1.741 percent, and the return on 10-year bonds lost 5.4 basis points to 1.893 percent.

The local currency closed at 1,136.90 won against the dollar, up 2.15 won from the previous session.

BY KO JUN-TAE, YONHAP [ko.juntae@joongang.co.kr]