Kospi drops 2.13 percent to a 20-month low and won falls

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Kospi drops 2.13 percent to a 20-month low and won falls

Published: 06 Jul. 2022, 18:14 Updated: 06 Jul. 2022, 18:15

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,292.01 points on Wednesday, down 49.77 points, or 2.13 percent, from the previous trading day. [NEWS1]

Stocks dipped to a 20-month low Wednesday, as bleak data from Europe and a sharp fall in oil prices underscore worries over a global economic recession. The won fell sharply against the dollar.

The Kospi retreated 49.77 points, or 2.13 percent, to close at 2,292.01, coming below the 2,300 mark for the first time since Oct. 30, 2020.

Trading volume was moderate at 400.3 million shares worth 8.53 trillion won ($6.53 billion) with decliners outstripping gainers 697 to 177.

"The looming recession issue dampens investor sentiment in the stock market, which is heavily influenced by exports," said Seo Sang-young, an analyst at Mirae Securities. "And the won's steep fall against the dollar can have a negative impact on the inflow of foreign funds."

In Seoul, foreigners and institutions turned to a selling mode, unloading a net 314.8 billion won and a net 622.9 billion won, respectively. Individual investors snapped up a net 896.4 billion won.

Investors will look to the U.S. Federal Reserve's latest minutes due out Wednesday as they seek clues to the Fed's next move in the monetary tightening ahead of the meeting slated for later this month, analysts said.

Large-cap tech and refinery stocks led the Kospi's fall. Samsung Electronics lost 1.4 percent to 56,400 won and SK Innovation slumped 5.26 percent to 171,000 won on a decline in oil prices.

Hyundai Motor also dipped 2.82 percent to 172,500 won and Posco Holdings slid 3.56 percent to 230,000 won.

In contrast, LG Energy Solution soared 2.49 percent to 370,500 won on news that it will supply batteries to Japanese commercial vehicle maker Isuzu for its electric trucks in a deal reportedly valued at 1 trillion won.

The local currency ended at 1,306.40 won against the dollar, up 6.1 won from Tuesday's close, the lowest since July 13, 2009, when the won ended at 1,315 per the greenback.

The Kosdaq lost 6.32 points, or 0.84 percent, to close at 744.63 points.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds lost 9.2 basis points to 3.223 percent.

BY LIM JEONG-WON, YONHAP [[email protected]]