Prospect of tightening pushes Kospi down
The benchmark Kospi fell for the second consecutive day in a row by 33.64 points, or 1.33 percent, to 2,491.75. Rising U.S. government bond yields and the strengthening of the U.S. dollar were some of the major factors accountable. The announcement of the Samsung heir’s release from prison helped the Kospi rise a couple of points in the afternoon before closing.
Foreigners sold a net 454.4 billion won ($417.6 million) worth of stocks and institutional investors offloaded a net 40 billion won worth of stocks, which weighed on the main index.
Park Chun-young, an analyst at Daishin Securities, said foreign and institutional investors offloaded tech stocks, bringing the main index down.
Large-cap stocks had a mixed day across the board.
Market bellwether Samsung Electronics rose 0.46 percent to 2,396,000 won after the Seoul High Court ruled that the company’s Vice Chairman Lee Jae-yong can be released on probation. The executive will not have to serve prison time if he stays out of trouble for four years.
Among gainers, KB Financial Group, a major banking group, rose 1.96 percent to 67,700 won.
Meanwhile, Korea’s biggest carmaker, Hyundai Motor, fell 2.15 percent to 159,000 won, and No. 2 chipmaker SK Hynix shed 2.77 percent to 70,200 won.
The Kosdaq, Korea’s secondary market, fell by 41.25 points, or 4.59 percent, to close at 858.22. Foreign investors were discouraged by the 2 percent nosedive of the U.S. Nasdaq.
Though all sectors were hit, stocks of pharmaceutical companies saw the greatest fall. Celltrion fell by 5.11 percent, while its subsidiary Celltrion Healthcare dropped by 5.75 percent. ViroMed, a local biotechnology company, moved down 14.73 percent.
The local currency closed at 1,088.50 won against the U.S. dollar, down 8.80 won from the previous session’s close.
Bond prices, which move inversely to yields, closed lower. The yield on three-year bonds rose four basis points to 2.29 percent and the return on 10-year government bonds gained five basis points to 2.80 percent.
BY KIM EUN-JIN, YONHAP [kim.eunjin1@joongang.co.kr]
with the Korea JoongAng Daily
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