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Punters wary as Fed chairman prepares to talk

July 10,2019
Korean stocks fell for the second day in a row Tuesday as investors trod cautiously ahead of the U.S. Federal Reserve chairman’s congressional testimony on its rate policy. The won appreciated against the dollar.

The benchmark Kospi slipped 12.14 points, or 0.59 percent, to close at 2,052.03. Trade volume was moderate at 433 million shares worth 4.36 trillion won ($3.69 billion).

The Tuesday closing was the lowest since May 31, when the Kospi closed at 2,041.74.

On Monday, the Kospi sank 2.2 percent as hopes for steep rate cuts in the United States diminished following stronger-than-expected jobs data in the world’s No. 1 economy.

Individuals bought a net 83.4 billion won worth of shares and foreign investors bought a net 23.4 billion won worth. Institutions sold a net 114.9 billion won of stocks.

The local stock market opened higher as investors scooped up oversold shares such as major tech firms.

But it pared back gains as investors took to the sidelines ahead of the Fed chairman’s statement slated for later this week. Market sentiment was further dampened by Japan’s export restrictions on key materials going to Korea.

“Uncertainties over Japan’s export curbs continued to weigh on the market,” said Lee Won, an analyst at Bookook Securities.

Major tech stocks rebounded from Monday’s sharp declines as investors sought bargains, but auto and bio stocks finished in negative terrain.

Top cap Samsung Electronics rose 1.58 percent to end at 45,100 won, and SK Hynix, a global chipmaker, gained 3.56 percent to end at 69,800 won.

Naver, the operator of the country’s top Internet portal, shed 2.53 percent, closing at 115,500 won.

Top automaker Hyundai Motor fell 0.72 percent to finish at 137,500 won, while its smaller affiliate Kia Motors rose 0.23 percent to 43,350 won.

Leading pharmaceutical company Celltrion dropped 6.55 percent to end at 192,500 won, and Samsung BioLogics tumbled 4.11 percent to close at 303,500 won.

The Kosdaq fell 10.92 points, or 1.63 percent, to end the session at 657.80.

The tech-heavy index was dragged down due to a 1.5-percent fall in Nasdaq Biotechnology Index overnight and the rising concerns over Japan’s additional regulation on exports.

The won closed at 1,180.50 won against the dollar, down 1.5 won from the previous session’s close.

Bond prices ended lower. The yield on three-year bonds rose 0.2 basis points to 1.42 percent. The yield on 10-year bonds rose 0.8 basis points to 1.54 percent.

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