Stocks drop as U.S. remains tough on China
Stocks sank 1.5 percent Tuesday on news that the United States is considering imposing tougher trade restrictions on China. The won fell sharply against the dollar.The Kospi fell 33.29 points, or 1.48 percent, to close at 2,208.88. Trading volume was moderate at 464 million shares worth 6.3 trillion won ($5.2 billion), with losers outnumbering gainers 670 to 180.
According to reports, the United States may force global chipmakers using U.S.-made equipment to obtain licenses before supplying their chips to Huawei.
Washington is also considering blocking exports of jet engines made by General Electric, which could limit China’s efforts to develop its own passenger jets, according to the news.
“This is bad news and should be considered as a risk at a time when the market relies heavily on IT shares,” said Ha In-whan, an analyst at Meritz Securities. “The U.S.-China trade war was somewhat forgotten following their phase one trade deal, but issues should be always monitored closely.”
Institutional investors sold a net 527 billion worth of local shares, while foreigners dumped a net 305 billion won. Retail investors bought a net 766 billion won.
Most large caps stayed in negative terrain, with tech shares suffering a sharp drop.
Samsung Electronics plunged 2.76 percent to 59,800 won, while chipmaker SK hynix dipped 2.86 percent to 102,000 won. Hyundai Motor slid 2.21 percent to 132,500 won, and auto parts maker Hyundai Mobis lost 1.46 percent to 235,500 won. Kia Motors lost 0.24 percent to close at 41,350 won.
Steelmaker Posco slipped 0.46 percent to 217,500 won, while chemical firm LG Chem sank 0.36 percent to 418,000 won. Pharmaceutical firm Samsung BioLogics lost 1.16 percent to 513,000 won, while Celltrion lost 0.81 percent to reach 184,500 won.
Amorepacific was down 2.31 percent at 190,000 won, and LG Household & Health Care lost 0.50 percent to 1,390,000 won.
The local currency closed at 1,189.5 won against the dollar, up 5.6 won from the previous session’s close. The secondary Kosdaq was down 9.67 points, or 1.40 percent, to close at 682.92.
The yield on three-year bonds lost 5.1 basis points to 1.272 percent, while the benchmark 10-year government bond market was closed today in observance of Presidents’ Day.
BY KIM YEON-AH, YONHAP [kim.yeonah@joongang.co.kr]
with the Korea JoongAng Daily
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