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U.S.-China trade friction takes toll on Kospi

Sept 20,2018
Korean stocks ended slightly lower Wednesday as investors took to the sidelines on lingering worries over trade friction between the United States and China. The Korean won appreciated against the U.S. dollar.

The benchmark Kospi shed 0.52 points, or 0.02 percent, to close at 2,308.46. Trade volume was moderate at 5.93 trillion won ($5.29 billion).

After opening higher on Wall Street gains, the index closed lower on mixed signals regarding U.S.-China trade friction.

Beijing vowed retaliatory tariffs on U.S. goods worth $60 billion on Tuesday after Washington said it will impose 10 percent tariffs on about $200 billion worth of imports from China, with duties set to rise to 25 percent next year.

But this was not the most feared scenario, according to analysts, as the tariffs by China are lower than expected and officials from the two countries have left room for dialogue.

“Investors also seem to be taking a wait-and-see posture ahead of the U.S. central bank’s interest rate decision due next week,” added Kim Sung-hwan, an analyst at Bookook Securities.

Foreign investors picked up a net 386.5 billion won while institutions bought a net 9.8 billion won worth of local shares. Retailers sold a net 110.8 billion won.

Chemicals and utilities led the fall, though large-cap tech shares rose.

LG Chem skidded 1.91 percent to 360,000 won. Amorepacific retreated 1.35 percent to 255,500 won while rival LG Household & Healthcare decreased 0.96 percent to 1,242,000 won.

Top mobile carrier SK Telecom sank 2.71 percent to 269,500 won and state power firm Korea Electric Power Corporation moved down 1.86 percent to 28,950 won.

But market bellwether Samsung Electronics surged 1.43 percent to 46,150 won and SK Hynix grew 1.03 percent to 78,800 won.

Shares linked to inter-Korean cooperation projects went down as investors took profits on Wednesday, the second day of President Moon Jae-in and North Korean leader Kim Jong-un’s three-day summit.

The secondary Kosdaq fell 4.94 points, or 0.59 percent, to 826.91 on weak pharmaceutical shares.

The Korean won closed at 1,121.10 won against the U.S. dollar, down 2.1 won from the previous session’s close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year bonds gained 1.6 basis points to 2.0 percent, and the return on 10-year bonds increased 3.7 basis points to 2.37 percent.


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


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