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Market flat as Fed chief sheds doubt on cuts

June 27,2019
Shares ended almost flat Wednesday after a choppy trading session with no driving momentum for investors to sell or buy, analysts said. The won fell against the dollar.

The benchmark Kospi inched up 0.21 points, or 0.01 percent, to close at 2,121.85. Trading volume was moderately high at 725 million shares worth 4.38 trillion won ($3.7 billion), with losers outnumbering gainers 510 to 296.

The index opened lower tracking overnight Wall Street losses but swerved in and out of positive terrain throughout the day before closing a tad higher.

U.S. stocks dropped after Fed Chairman Jerome Powell hinted that an interest rate cut in July is not a done deal, saying that the American central bank will wait and see.

He added that the Fed’s monetary policy should not “overreact” to things that are short-term or transient.

“The Korean index apparently took a cue from the U.S. stock markets, but still, a wait-and-see stance is prevailing among investors ahead of the Group of 20 (G-20) summit in Japan,” said Lee Young-gon, an analyst at Hana Financial Investment.

Individual investors offloaded a net 73 billion won worth of local stocks, while institutions and foreigners were net buyers, snatching up 59 billion won and 17 billion won worth of shares, respectively.

Large cap shares ended mixed across the board.

Market kingpin Samsung Electronics rose 0.22 percent to 45,700 won, and No. 2 chipmaker SK Hynix surged 3.3 percent to 68,900 won. But LG Electronics fell 1.25 percent to 79,300 won.

Pharmaceutical firms were among the gainers, with top player Celltrion advancing 1.2 percent to 210,500 won, while Samsung BioLogics inched up 0.16 percent to 313,500 won.

Chemical stocks finished bearish, with leading player LG Chem sliding 1.28 percent to 347,500 won, while its smaller rival Lotte Chemical declined 0.58 percent to 255,500 won.

Auto stocks ended mixed, with No. 1 automaker Hyundai Motor ending flat at 141,500 won, while its sister company Kia Motors increased 0.34 percent to 43,650 won. The secondary Kosdaq fell 0.65 points, or 0.09 percent, to close at 709.37.

The local currency closed at 1,156.6 won against the greenback, up 0.4 won from the previous session’s close.

Bond prices, which move inversely to yields, ended lower. The yield on three-year bonds added 1.8 basis points to 1.496 percent, and the return on 10-year bonds gained 2.1 basis points to 1.605 percent.

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