Markets see rebound after China’s plunge
Global markets started to rebound on Wednesday from China’s steepest four-day plunge since 1996, referred to as “Black Monday.”The benchmark Kospi got closer to the 1,900 mark, rising 47.46 points or 2.57 percent to close at 1,894.09. Foreign investors unloaded local shares for the 15th consecutive day while retail and institutional investors were net buyers.
The secondary Kosdaq gained 22.01 points or 3.41 percent to 667.44.
By market capitalization, top shares on the Kospi mostly rose.
Samsung Electronics, affected by foreign investors’ sell-offs, nudged down 1.11 percent to close at 1,067,000 won ($900). Korea Electric Power Corporation (Kepco), third by market cap, increased 3.47 percent to 49,150 won, and cosmetics company AmorePacific climbed 6.02 percent to 361,000 won.
Both Samsung C&T and Cheil Industries’ shares saw a sharp rise a day before the trading of Samsung C&T’s stocks was suspended. Cheil Industries surged 9.7 percent to close at 147,000 won and Samsung C&T soared 5.02 percent to 48,100 won. The two companies will merge Sept. 1.
After the two Koreas made a dramatic settlement early Tuesday, Hyundai Merchant’s shares skyrocketed 22.51 percent to close at 8,600 won amid investors’ expectation that the company’s Mount Kumgang tourist resort in North Korea could reopen.
Hanmi Pharmaceutical benefitted from expectations about its new diabetes drug, which boosted shares 7.27 percent to 435,000 won. Holding company Hanmi Science also spiked 11.59 percent to 154,000 won.
The won led gains in emerging-market currencies, climbing 0.8 percent to 1,185.82 a dollar in Seoul, data compiled by Bloomberg showed.
“China’s rate cut will steady the decline in stocks for now, while we still need to watch longer-term effects,” said Jeon Seung-ji, a currency analyst at Samsung Futures in Seoul. “The won will trade around the 1,190 level for some time with all the focus on Asian equities.”
Government bonds fell, raising the yield on 10-year notes up four basis points to 2.26 percent, Korea Exchange prices showed. The three-year yield rose two basis points to 1.73 percent.
BY CHOI JEONG-PIL, BLOOMBERG [choi.jeongpil@joongang.co.kr]
with the Korea JoongAng Daily
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