Kospi falls as U.S. tax plan causes uncertainty

Seoul’s main bourse fell on Monday despite strong exports in November as uncertainty lingers over U.S. corporate tax reforms, which led foreigners to sell shares worth 28.1 billion won ($25 million). The Korean won fell against the U.S. dollar.

The benchmark Kospi shed 12.6 points, or 0.5 percent, to close at 2,530.35. Trade volume was relatively small at 263.65 million shares worth 6 trillion won, with losers outnumbering gainers 424 to 375. With the Kospi closing lower on Monday, it continued its losing streak that began Thursday last week.

Market heavyweights retreated after U.S. Republicans released a tax plan last week that would postpone promised corporate tax cuts by one year, prompting Wall Street to close lower Friday.

“Kospi went down as traders took to the sidelines on rising uncertainties over the U.S. tax reform bill,” Jeong Dai, a researcher at Meritz Securities said. “Some investors cashed in gains from recent rallies on lack of momentum following the third-quarter earnings season.”

Foreign investors and institutions sold a net 63.61 billion won and 226.71 billion worth of local stocks, while retail investors scooped up a net 257.83 billion won.

Market bellwether Samsung Electronics advanced 1.46 percent on Monday to close at 2,819,000 won. Second-largest chipmaker SK Hynix closed at 82,300 won, up 0.37 percent compared to the previous session.

LG Electronics inched down 1.48 percent to 93,000 won while LG Display also saw its share decreased by 1.32 percent to close at 29,800 won.

SK Innovation, the top oil-refiner in Korea, decreased 3.79 percent to 203,000 won on Monday. Another oil-refiner, the country’s No. 3 in the industry, saw its share reduced by 3.97 percent to 121,000 won.

Auto shares rose on hopes that improved ties with China would boost their sales in the major export destination. Leaders of the two nations agreed that they would work on improving relations during their meeting over the weekend on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Economic Leaders’ Meeting in Vietnam.

Hyundai Motor, the No. 1 automaker, advanced 3.88 percent to 160,500 won, and its sister company Kia Motors gained 3.02 percent to 35,800 won.

Bond prices, which move inversely to yields, fell. The yield on three-year Treasuries rose 2.3 basis points to 2.180 percent, and the return on benchmark five-year government bonds gained 3.5 basis points to 2.385 percent.

BY KANG JIN-KYU, YONHAP [kang.jinkyu@joongang.co.kr]

korea joongAng daily

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Kospi falls as U.S. tax plan causes uncertainty

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