Kospi slides as institutions decide to sell
Korean stocks declined yesterday, led by tech and other blue-chip stocks on a grim economic outlook, with the country’s key stock index hitting a fresh 16-month low. The benchmark Kospi fell 19.77 points, or 1.32 percent, to 1,474.15.“Amid a lack of particular market-moving leads, institutional investors have reversed their net-buying mode from the morning while foreign investors continued their selling spree as well,” said Lim Dong-min, an analyst at Dongbu Securities.
Most blue chips were rattled hard, with tech and construction stocks leading the overall losses. Samsung Electronics, the tech bellwether, fell 1.7 percent to 521,000 won ($481.90) and Daewoo Engineering and Construction tumbled 2.9 percent. Morgan Stanley cut its recommendation to “equal-weight,” from “overweight,” in a report on Samsung Electronics. The brokerage said it expects a “hard landing” for liquid-crystal displays and that the dynamic random access memory, or DRAM, industry “refuses to consolidate and improve.”
Hyundai Motor, the nation’s biggest carmaker, dropped 2.9 percent, the most since July 15. Kia Motors, an affiliate, slid 5.5 percent, the first decline in five days. Hyundai and Kia said on Wednesday they lost about 48 billion won in production due to strikes that day, the first of three planned days of stoppages. Hyundai is recalling 65,000 Elantra sedans in the United States, to replace a fuel pump that may lose pressure and degrade the engine’s performance. The Elantra is the company’s second-best selling vehicle in the country.
GS Holdings, which operates the nation’s second-biggest oil refiner, declined 3.2 percent, the lowest since Jan. 8, 2007. Analysts’ estimates for the company’s earnings will “continue to decline” as a weakening currency increases the value of the company’s dollar-denominated debt, Goldman Sachs said in a report. Steelmakers and financials also lost ground. Top steelmaker Posco slid 1.5 percent and leading lender Kookmin Bank also lost 1.7 percent. Kangwon Land, which runs the nation’s only casino open to locals, retreated 6.3 percent, the lowest since March 30, 2007. Citigroup cut its recommendation to “hold” from “buy” in a report. Korea’s gaming regulator “stands firm” in its proposal for a revenue cap on the industry, the brokerage said.
Yonhap, Bloomberg
with the Korea JoongAng Daily
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