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Seoul stocks down as trade tensions worsen

July 09,2019
Stocks sank more than 2 percent to hit their lowest point in more than a month on Monday as strong U.S. job data clouded hopes of a rate cut by the Federal Reserve amid growing tensions between Korea and Japan.

The won dropped sharply against the dollar.

The benchmark Kospi dipped 46.42 points, or 2.2 percent, to close at 2,064.17, its lowest since May 31, when the corresponding figure was 2,041.74. Trade volume was moderate at 507 million shares worth 4.27 trillion won ($3.91 billion), with losers outnumbering gainers 839 to 44.

The local stock market opened lower, tracking declines on Wall Street late last week.

Market sentiments were dampened by better-than-expected U.S. employment data that dimmed hopes of a steeper rate cut in the world’s largest economy this month, which also caused the greenback to firm against major currencies.

Japan’s export curbs on key materials used in semiconductor and display products weighed on local technology stocks.

“Market uncertainty emerged again due to Japan’s export curbs,” said Lee Won, an analyst at Bookook Securities, adding investors took to the sidelines after the Korean government slashed this year’s economic growth outlook last week, citing sluggish exports and investment.

Samsung Electronics declined 2.74 percent to end at 44,400 won, and SK Hynix, a global chipmaker, fell 1.46 percent to 67,400 won.

Naver shed 2.07 percent at 118,500 won.

Automakers also traded in negative terrain, with industry leader Hyundai Motor down 2.12 percent to 138,500 won, and its smaller affiliate Kia Motors falling 0.35 percent at 43,250 won.

Yet bio shares ended mixed. Celltrion fell 0.96 percent to 206,000 won, but Samsung BioLogics inched up 0.80 percent to 316,500 won. Hanmi Pharmaceutical dropped 2.63 percent to 296,000 won.

The secondary Kosdaq lost 25.45 points, or 3.67 percent, to close at 668.72.

The local currency closed at 1,182.0 won against the dollar, up 11.6 won from the previous session’s close, marking its lowest level in 20 sessions.

The won’s sharp decline was in line with the dollar’s surge against major currencies.

Bond prices, which move inversely to yields, ended higher. The yield on three-year bonds fell 0.1 basis points to 1.422 percent, and the return on 10-year bonds dropped 0.3 basis points to 1.530 percent.

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