Market drops on worries of U.S.-China row
The Kospi shed 11.57 points, or 0.47 percent, to close at 2,449.81. Trade volume was high at 9.49 trillion won ($8.79 billion), with losers outnumbering gainers 618 to 226.
The index got off to a strong start in the morning after a three-day holiday following gains by Wall Street on Monday.
But the gains disappeared in the afternoon as China said its trade surplus with the United States widened in April from a month earlier, prompting worries of a possible full-scale trade war between the world’s two largest economies.
“China’s April trade data looked good and brightened the global economy in the coming future,” said analyst Seo Sang-young from Kiwoom Securities. “But the country’s increased trade surplus with the United States may spark a second round of tensions between Washington and Beijing.”
Steelmakers and construction companies, which gained on hopes for improved inter-Korean relations, led the decline, as investors were discouraged by lingering talks on the date and location of the U.S.-North Korea summit.
Korea’s leading steelmaker Posco fell 2.31 percent to 359,000 won, and Hyundai Engineering & Construction tumbled 4.25 percent to 63,100 won.
Leading chemicals manufacturer LG Chem slumped 3.08 percent to 330,500 won, and Kumho Petrochemical declined 2.76 percent to 105,500 won amid rising worries over the future of the U.S.-Iran nuclear agreement. Cosmetics firms also ended on a bearish note, as industry leader Amorepacific slid 0.71 percent to 347,500 won and LG Household & Health Care dropping 0.84 percent to 1,293,000 won.
But tech giant Samsung Electronics rose 1.35 percent to 52,600 won on the second trading day of its stock split, and Samsung Biologics, the bio unit of Samsung Group, moved up 3.06 percent to 370,500 won despite its snowballing accounting fraud scandal.
The secondary Kosdaq tumbled 29.12 points, or 3.4 percent, to close at 827.22 as foreigners and institutional investors sold off bio shares en masse. Celltrion Health shed 6.67 percent to 77,000 won and SillaJen nose-dived 12.75 percent to close at 65,700 won.
The local currency closed at 1,076.5 won against the U.S. dollar, up 0.7 won from the previous session.
Bond prices, which move inversely to yields, closed lower. The yield on three-year U.S. bonds gained 3.1 basis points to 2.311 percent, and the return on benchmark five-year government bonds added 2.8 basis points to 2.584 percent.
BY YONHAP, SEO JI-EUN [seo.jieun@joongang.co.kr]
with the Korea JoongAng Daily
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