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Shares continue fall after Friday’s small rally

May 14,2019
Shares dropped on Monday, after a slight rebound in the previous session, amid a worsening trade dispute between the world’s two largest economies, which may now be on the verge of an all-out trade war.

The local currency fell sharply to the lowest level in more than two years against the dollar.

The benchmark Kospi plunged 29.03 points, or 1.38 percent, to close at 2,079.01, the lowest since January 14, 2019, when the comparable figure was 2,064.52 points.

Trading volume was moderate, at about 494 million shares worth 4.5 trillion won ($3.47 billion). Losers outpaced gainers 701 to 143.

Local shares extended their losses throughout the session after opening significantly lower, losing 0.83 percent in the first 15 minutes of trading.

The sharp drop follows increased uncertainties created by the trade row between the United States and China, Korea’s two largest trade partners.

U.S. President Donald Trump increased the import tariff on $200 billion of Chinese goods to 25 percent, from 10 percent, on Friday. China threatened it will retaliate.

“The drop in the won-dollar exchange rate is leading to an outflow of foreign funds, while renewed concerns over the U.S.-China trade dispute also dampened investor sentiment,” said Seo Sang-young, a researcher at Kiwoom Securities.

Institutional investors offloaded around 130 billion won worth of shares, while foreign investors sold a net 138 billion won.

Individuals scooped up a net 258 billion won.

Most large caps suffered heavy losses.

Samsung Electronics lost 0.58 percent, to 42,650 won, with No. 2 chipmaker SK Hynix falling 1.21 percent, to 73,500 won.

Hyundai Motor lost 0.77 percent, to reach 129,000 won, while Kia Motors stayed put at 42,350 won. Auto parts maker Hyundai Mobis plunged 2.05 percent, to 214,500 won.

Celltrion tumbled 3.47 percent, to end at 194,500 won. Leading steelmaker Posco went down 1.04 percent, to 238,500 won.

The secondary Kosdaq fell 13.82 points, or 1.91 percent, to close at 708.80.

The local currency closed at 1,187.50 won against the dollar, up 10.50 won from the previous session’s close and marking its lowest point in over two years.

Bond prices, which move inversely to yields, ended lower. The yield on three-year bonds rose 0.2 basis points to 1.721 percent, and the return on 10-year bonds gained 0.1 basis points to 1.874 percent.


BY KO JUN-TAE, YONHAP [ko.juntae@joongang.co.kr]


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