Kospi falls below 2,000 as foreigners pull out
It didn’t take long before the Kospi started tumbling down below the 2,000 mark as foreign investors unloaded their shares on the main bourse.Market analysts said foreign investors were pulling out largely due to concerns over an early interest rate hike by the Fed as a U.S. unemployment report released over the weekend turned out to defy earlier speculation. Many foreign investors also appeared to have been closely monitoring quantitative easing by the European Central Bank.
The Kosdaq ended its five-day winning streak, dropping 6.58 points or 1.03 percent to close at 629.26. And the Kospi on Monday closed 20.12 points, or 1 percent, lower than Friday to 1,992.82.
The market started off at 2,004.18 but sank to the 2,000 mark in just 10 minutes as foreign investors became net sellers, ending a 10-trading-day buying spree that started Feb. 23. On Friday, the U.S. Labor Department announced that 295,000 jobs were created in February.
The private sector alone added 288,000 new jobs. Overall, the figure is higher than the market’s earlier estimate of 235,000, with 225,000 in the private sector. More than 200,000 jobs have been created each month since March 2014. The unemployment rate fell from the previous month’s 5.7 percent to 5.5 percent.
Such a positive report has increased the possibility that the U.S. central bank may raise the near-zero interest rate, which the market predicts could come as early as June. As a result, the two-year maturity U.S. treasury on Friday saw its yield go up 12 basis points, and 13 basis points for 10-year treasury yield.
Market bellwether Samsung Electronics saw its shares slip down 1.53 percent to 1,420,000 won ($1,225). Hyundai Motor also dropped 2.31 percent to 169,000 won, while Posco, the nation’s top steelmaker, declined 1.83 percent to 267,500 won. SK Hynix fell 2.38 percent to 45,100 won.
On the other hand, Korea Electric Power Corporation gained 0.34 percent to 44,850 won. Samsung SDS edged up 1.54 percent to 297,000 won. LG Chem added 1.07 percent to 235,500 won. The won weakened 1.2 percent to 1,112.19 against the greenback in Seoul, the biggest drop since Feb. 12.
BY KIM YOUNG-SHIN, BLOOMBERG [kim.youngshin@joongang.co.kr]
with the Korea JoongAng Daily
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