Kospi retreats as Chinese economy slows
The benchmark Kospi’s five-day advance ended on Tuesday as it fell back below 1,920 on disappointing news including more indicators suggesting the Chinese economy is slowing down, the sharpest drop in exports of Korean goods last month since 2009 and continuous pressure from the re-emerged concerns over the Fed’s interest rate hike.On Tuesday the Chinese manufacturing purchasing managers’ index (PMI) in August fell below 50 to 49.7, which is a clear sign that the world’s biggest market is losing steam.
The likelihood of an increase by the Fed has led to the continuous sell-off by foreign investors that has lasted for the last 19 consecutive trading days. Institutional investors have joined in resulting in a 27.26-point loss or a 1.4 percent drop to close at 1,914.23.
Market bellwether Samsung Electronics nudged down 0.37 percent to close at 1,085,000 won ($926). Chipmaker SK Hynix dropped 3.91 percent to 34,400 won and leading cosmetics maker AmorePacific lost 3.96 percent to 363,500 won.
Leading automaker Hyundai Motor weakened 1.68 percent to 146,500 won and its auto parts affiliate Hyundai Mobis slipped 1.69 percent to 203,000 won. Another affiliate Kia Motors closed at 48,050 won, down 1.33 percent.
Cheil Industries sharply decreased 4.49 percent to close at 363,500 won after the company enjoyed an upbeat momentum during the past few weeks until yesterday’s successful merger with Samsung C&T.
Meanwhile, Korea Electric Power Corporation (Kepco) rose 1.04 percent to 48,500 won and Samsung SDS inched up 0.19 percent to close at 257,000 won.
Lotte Group’s affiliates were the winners of the day following its efforts to reform its structural governance. Among the affiliates, Lotte Confectionary, the biggest winner, skyrocketed 10.93 percent to finish at 2,161,000 won. Lotte Shopping soared 6.17 percent to 284,000 won and Lotte Food surged 5.26 percent to 1,160,000 won.
The won climbed after weakening 0.8 percent on Monday. The currency rallied 1 percent in its biggest move in two weeks, closing at 1,171.80 a dollar in Seoul.
The yield on Korea’s June 2025 notes rose three basis points to close at a three-week high of 2.32 percent in Seoul.
BY CHOI JEONG-PIL, BLOOMBERG [choi.jeongpil@joongang.co.kr]
with the Korea JoongAng Daily
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