Market hit after China limits tourism
The Kospi closed at 2,037.17 on Tuesday, down 10.57 points, or 0.52 percent, from the previous trading day.
Retail investors pushed the index down by offloading 173.4 billion won ($152.9 million) worth of shares. Foreign investors, too, sold 61 billion won.
Institutional investors prevented the index from falling further by purchasing 242.6 billion won in shares.
China’s decision to impose restrictions on low-cost tours and reduce the number of people traveling to Korea by 20 percent dealt a significant blow to cosmetics companies, which rely heavily on Chinese shoppers.
The country’s top cosmetics maker, AmorePacific, slumped 7.12 percent to 345,500 won, and LG Household and Healthcare tumbled 8.34 percent to close at 846,000 won. Hotel Shilla also took a hit, sharply declining 6.94 percent to 57,700 won.
The secondary Kosdaq fell for the fourth straight trading day to close at 640.17, down 7.71 points, or 1.19 percent, from the previous trading day. It was the index’s lowest point in eight months.
Pharmaceuticals dragged down the index, with Celltrion slipping 0.48 percent to 103,700 won and Komipharm and Medytox each losing 0.24 percent and 3 percent to close at 41,500 won and 378,300 won.
The Korean won weakened 0.2 percent to 1133.5 against the dollar on investor concerns regarding China’s tourism decision.
“The issue is painful,” said Lee Seung-jun, managing director of active investment at Samsung Asset Management. “Duty-free operators will be affected the most.”
The government’s three-year bond yield inched up one basis point to 1.4 percent, while the 10-year bond yield increased three basis points to 1.64 percent.
BY SONG KYOUNG-SON, BLOOMBERG [song.kyoungson@joongang.co.kr]
with the Korea JoongAng Daily
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