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BOK key rate cut pushes Seoul stocks down

July 19,2019
Korean stocks closed lower Thursday even after the central bank unexpectedly cut the key rate amid persistent trade woes with Japan. The won appreciated against the dollar.

The benchmark Kopsi dropped 6.37 points, or 0.31 percent, to 2,066.55. Trading volume was moderate at 437 million shares worth 3.85 trillion won ($3.26 billion).

The Kospi opened lower, taking a cue from overnight losses on Wall Street and further extended losses even after the Bank of Korea (BOK) unexpectedly cut its policy interest rate by a quarter percentage point to 1.50 percent to help spur growth as a trade feud with Japan adds more uncertainty to Asia’s fourth-largest economy.

“The BOK’s rate cut is a positive factor for the market,” said Oh Hyung-seok, an analyst at Samsung Securities. “The index, however, closed lower due to negative factors, such as export curbs by Japan.”

Individuals bought a net 100.7 billion won worth of shares and foreign investors bought a net 71.1 billion won worth. Institutions sold a net 175.1 billion won of stocks.

Most large-cap shares closed mixed.

Samsung Electronics gained 0.11 percent after opening lower to close at 46,100 won. SK Hynix, the world’s No. 2 memory chip maker, finished 0.13 percent higher at 74,700 won. Leading automaker Hyundai Motor moved up 0.37 percent to 134,000 won. Auto parts maker Hyundai Mobis moved down 1.49 percent at 231,000 won.

Pharmaceutical firms, meanwhile, closed lower, with Celltrion losing 2.17 percent to reach 180,500 won on poor earnings forecasts. Samsung BioLogics was down 0.35 percent at 286,000 won. Hanmi Pharmaceutical fell 1.01 percent to 294,000 won.

Shares of YG Entertainment, the management agency of K-pop band BIGBANG, shed 2 percent to end at 27,000 won on the news that Yang Hyun-suk, its former CEO and chief producer, has been booked on suspicions that he arranged sex services for multiple foreign investors.

The Kosdaq fell 1.13 points, or 0.17 percent, to end the session at 665.15.

The tech-heavy index was initially lifted by foreign buying of shares and a rise in Philadelphia Semiconductor Index overnight, but was eventually dragged down by bearish pharmaceutical shares.

The won closed at 1,178.8 won against the dollar, down 2.5 won from Wednesday’s close.

Bond prices, which move inversely to yields, ended higher. The yield on three-year bonds fell 5.4 basis points to 1.35 percent. The yield on 10-year bonds fell 7.4 basis points to 1.47 percent.

BY KIM HE-YU, YONHAP [kim.heyu@joongang.co.kr]


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