Chinese volatility keeps Kospi falling
Seoul’s main bourse fell past Monday’s drop amid continued volatility in the Chinese market, but the benchmark Kospi was relatively stable compared to the previous trade.The Kospi on Tuesday closed at 1,890.86 after losing 3.98 points or 0.21 percent from the previous day. Foreign investors continued to offload shares for the 27th consecutive trading day. But the market’s decline was limited, as retail and institutional investors have been purchasing more.
The Chinese stock market was unstable earlier in the day as the Shanghai Composite Index fell below the 3,000 level, a first since September. But it rebounded later in the day to finish 0.2 percent higher at 3,022.86.
Kospi market bellwether Samsung Electronics saw its shares drop another 0.52 percent to close at 1,146,000 won, following disappointing fourth-quarter performances announced Friday. Samsung Electronics shares have fallen nearly 5 percent compared to the beginning of this year.
Other IT companies saw their stock prices rise. Web portal Naver saw its share value jump 3.5 percent to 650,000 won thanks to growing expectations for the company’s fourth quarter earnings report. KDB Daewoo Securities projected that Naver’s operating profits will surge 23.1 percent to 238.6 billion won from a year earlier, while revenue will increase 18 percent to 881 billion won, largely thanks to its mobile ads.
Kakao, which made headlines on Monday after announcing it had purchased the controlling stake of Loen Entertainment, which operates the popular digital music streaming-download service MelOn, also saw shares grow, closing 1.48 percent higher on the secondary Kosdaq market, to 116,400 won
The Korean won depreciated to its lowest level in five years. The won closed at 1,210.30 against the greenback, its lowest since July 2010, when it was trading at 1,215.6.
“Offshore investors repatriating proceeds from their sales of Korean stocks pushed the won down, and swings in Chinese markets reignited risk aversion,” said Kim Dong-wook, a currency trader at Kookmin Bank.
“China’s intervention to drain yuan liquidity is making traders nervous and prompting them to seek safety in the greenback.”
BY KIM YOUNG-NAM, BLOOMBERG [kim.youngnam@joongang.co.kr]
with the Korea JoongAng Daily
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