Kospi snaps winning streak as Fed meeting spooks investors

Finance

Published: 11 Jun. 2020, 19:32 Updated: 11 Jun. 2020, 20:30

Kospi snaps winning streak as Fed meeting spooks investors

Employees look at the screen in the dealing room of KB Kookmin Bank, in the financial district of Yeouido, western Seoul, Thursday. [YONHAP]

Stocks closed lower to end a nine-day winning-streak on Thursday, with a gloomy outlook from the U.S. Federal Reserve for the pandemic-hit economy spooking investors. The won fell against the greenback.

The Kospi fell 18.91 points, or 0.86 percent, to close at 2,176.78. Trading volume was high at about 814 million shares worth some 16.6 trillion won ($13.7 billion), with losers outnumbering gainers 660 to 218.

The index opened in negative terrain, tracking overnight losses on Wall Street that followed the rather disappointing outcome of the U.S. Federal Open Market Committee (FOMC) meeting.

Fed Reserve Chairman Jerome Powell noted the Covid-19 pandemic may have long-term drawbacks for the U.S. economy, undermining hopes for a speedy economic rebound.

His remarks also cast a shadow over Korea's export-dependent economy.

Korea's exports dropped for 14 consecutive months between December 2018 and January 2020, partly due to the prolonged U.S.-China trade dispute.

The United States, along with China, are Korea's largest trade partners.

Institutions offloaded a net 1.18 trillion won, the largest single-day sell-off since 1.24 trillion won tallied on May 31, 2018.

Retail investors, on the other hand, scooped up a net 1.27 trillion won, the largest amount since 1.7 trillion won on May 4. Foreigners dumped a net 116.1 billion won.

Most large caps closed in negative terrain.

Samsung Electronics lost 1.44 percent to 54,300 won, with chipmaker SK hynix tumbling 2.53 percent to 88,500 won.

Hyundai Motor plunged 2.69 percent to 108,500 won, and its affiliate Kia Motors lost 1.11 percent to 35,700 won.

Pharmaceuticals fared far better, with Celltrion soaring 7.26 percent to 288,000 won and Samsung BioLogics spiking 6.11 percent to 747,000 won.

The local currency closed at 1,196.40 won against the dollar, up 5.20 won from the previous session's close.

The secondary Kosdaq was down 1.56 points, or 0.21 percent, to close at 457.06.

Bond prices, which move inversely to yields, closed higher. The yield on three-year bonds lost 0.3 basis points to 0.837 percent, and the return on the benchmark ten-year government bond lost 1.0 basis points to reach 0.72 percent.

BY KIM YEON-AH, YONHAP [kim.yeonah@joongang.co.kr]