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Kospi inches down amid global protectionism

July 18,2018
Korean stocks ended lower Tuesday, as investors sold more shares than they bought amid political unrest over the minimum wage hike policy and lingering fears of global trade protectionism. The Korean won appreciated against the U.S. dollar.

The benchmark Kospi shed 4.07 points, or 0.18 percent, to close at 2,297.92. Trade volume was slim at 4.69 trillion won ($4.17 billion).

“No factors that would set the tone for the market seem to be here now,” said Kim Dae-jun, an analyst at Korea Investment & Securities.

“While investors are awaiting corporate reports, what lie underneath are some gloomy issues, such as concerns over trade disputes and impacts of the recent minimum wage hike for next year on the local industry,” he added.

On Monday, President Moon Jae-in said he would not fulfill his campaign pledge to raise the minimum wage to 10,000 won by 2020, in the face of rising protests from small business owners. The announcement came after the government decided to push up the minimum wage by 10.9 percent to 8,350 won for 2019 last Saturday.

Foreigners dumped a net 88.7 billion won worth of local shares, while institutions picked up 52.1 billion won and retail investors bought a net 125.9 billion won.

Big-cap tech shares finished lower, weighing down the index. Market kingpin Samsung Electronics fell 0.43 percent to 45,850 won.

Chemicals also lost ground, with LG Chem shedding 1.98 percent to 321,500 won, and cosmetics giant Amorepacific moving down 2.74 percent to 283,500 won.

But steelmakers went up on bargain hunting by investors. Market leader Posco added 1.27 percent to 319,000 won and Hyundai Steel increased 0.82 percent to 48,950 won.

Airlines also gathered ground on the back of falling global oil prices. Korean Air rose 0.69 percent to 29,100 won and Jeju Air soared 4.29 percent to 46,200 won.

Asiana Airlines surged 2.99 percent to 4,300 won after rumors surfaced that SK Group was considering a takeover. SK dismissed the rumor.

The secondary Kosdaq dropped 5.99 points, or 0.73 percent, to 819.72. The tech-heavy index was dragged down by the 0.7 percent decline of the U.S. Nasdaq Biotech index as well as foreign and institutional selling of large-cap pharmaceutical shares.

The local currency closed at 1,124.10 won against the U.S. dollar, down 5.1 won from Monday’s close.

Bond prices ended lower. The yield on three-year bonds added 0.6 basis points to 2.09 percent, and the return on 10-year bonds rose 0.6 basis points to 2.55 percent.


BY KIM EUN-JIN, YONHAP [kim.eunjin1@joongang.co.kr]


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