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Stocks drop on U.S.-China trade war worries

June 19,2018
Korea’s main index fell Monday, continuing a four-day losing streak as foreign investors sold off large-cap shares over growing worries of a U.S.-China trade war. The Korean won depreciated against the U.S. dollar.

The benchmark Kospi index retreated 27.8 points, or 1.16 percent, to close at 2,376.24. Trade volume was modest at 8.5 trillion won ($7.7 billion).

Foreigners offloaded a net 321.2 billion won while individuals sold a net 111.5 billion won worth of local stocks. Institutions were net buyers, snatching up a net 429 billion won.

Seoul stocks fell as investors felt jittery over U.S. President Donald Trump’s announcement of new tariffs on Chinese products.

The move intensified fear of trade friction between Korea’s two biggest trading partners.

“The trade dispute between the United States and China weighed on investors’ sentiment at a time when a recent U.S. rate hike lowered appetite for risk,” said Kim Sung-hwan of Bookook Securities.

Most large caps closed lower on the Kospi, with tech shares pulling down the main index.

Stocks in the electronics sector dropped 2.6 percent.

Top cap Samsung Electronics ended at 46,600 won, down 2.2 percent from the previous session’s close, and global chipmaker SK Hynix lost 3.45 percent to close at 84,000 won.

Construction and securities shares also lost. Posco dropped 2.47 percent to 356,000 won, while Hyundai Engineering & Construction fell 2.66 percent to 62,100 won. Mirae Asset Daewoo, a major stock brokerage, shed 2.32 percent to 8,850 won.

Insurers, meanwhile, gained ground, with Samsung Life Insurance gaining 1.49 percent to 102,000 won.

The secondary Kosdaq also ended lower, dropping 25.99 points, or 3 percent, to 840.23. The tech-heavy index was dragged down by institutional and foreign selling on large-cap semiconductor and IT shares.

Foreigners sold a net 23.3 billion won and institutions sold a net 95.6 billion won. Individuals were net buyers, purchasing a net 114.4 billion won.

Semiconductor shares lost 4.7 percent. Chemical and pharmaceutical shares both dropped 4.1 percent.

The local currency closed at 1,104.80 won against the U.S. dollar, up 7.1 won from the previous session’s close.

Bond prices, which move inversely to yields, ended higher. The yield on three-year bonds shed 0.8 basis points to 2.18 percent, while the return on 10-year government bonds lost 2.2 basis points to 2.65 percent.


BY KIM EUN-JIN, YONHAP [kim.eunjin1@joongang.co.kr]


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