Seoul stocks inch down as U.S.-China tensions grow

Finance

Published: 01 Jul. 2020, 20:05

Seoul stocks inch down as U.S.-China tensions grow

A screen shows the closing stats for the Kospi in a trading room at Hana Bank in Jung District, central Seoul, Wednesday. [YONHAP]

Stocks closed lower Wednesday, erasing earlier gains amid rising U.S.-China tensions over a new security law in Hong Kong imposed by China's central government. The won fell against the dollar.

The Kospi lost 1.63 points, or 0.08 percent, to close at 2,106.70. Trading volume was moderate at about 1.1 billion shares worth some 10.1 trillion won ($8.4 billion), with losers outnumbering gainers 482 to 356.

Foreigners sold a net 166 billion won, extending a selling streak to a third session. Institutions bought a net 152 billion won, with retail investors purchasing a net 10 billion won.

The index got off to a strong start on hopes for an economic rebound but turned south in the afternoon amid concerns over the latest developments in Sino-American political frictions over Hong Kong.

"Despite positive leads from the U.S. economic indices, concerns have been building up over the U.S.-China political tensions," Lee Kyung-min, an analyst at Daeshin Securities, said.

"The index swung to losses in the afternoon following some related events, such as China's complaint that the United States is crossing the line over the Hong Kong national security law issue," he added.

China's complaint came hours after U.S. President Donald Trump wrote on Twitter that he's "more and more angry at China" over the new coronavirus pandemic.

Market concerns also grew as Korea's exports dropped for a fourth consecutive month in June. The United States and China are Korea's two largest trade partners.

In Seoul, market heavyweights closed mixed.

Samsung Electronics slid 0.38 percent to 52,600 won, while SK hynix added 0.24 percent to 85,300 won.

Samsung BioLogics tumbled 2.97 percent to 752,000 won, while LG Chem gained 0.20 percent to 491,500 won.

The local currency closed at 1,203.40 won against the dollar, down 0.40 won from the previous session's close.

The secondary Kosdaq was down 10.39 points, or 1.41 percent, to close at 727.58.

Bond prices, which move inversely to yields, closed lower. The yield on three-year bonds added 0.9 basis points to 0.849 percent, while the return on the benchmark ten-year government bond added 2.9 basis points to reach 0.65 percent.

BY CHEA SARAH, YONHAP [chea.sarah@joongang.co.kr]