Stocks give up early gains to end the day lower

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Stocks give up early gains to end the day lower

Published: 02 Jan. 2023, 17:34 Updated: 02 Jan. 2023, 18:07

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,225.67 points on Monday, down 10.73 points, or 0.48 percent, from the previous trading day. [NEWS1]

Stocks closed slightly lower in the first trading session of 2023 on institutional selling. The won declined against the dollar.

After choppy trading, the Kospi fell 10.73 points, or 0.48 percent, to close at 2,225.67 points.

Trading volume was light at about 335.7 million shares worth some 5.1 trillion won ($4.01 billion). Losers outnumbered gainers 712 to 178.

After a strong start, the Kospi surrendered gains as institutional investors offloaded tech shares in the afternoon.

Institutions sold a net 264.5 billion won worth of shares, while foreigners and retail investors snapped up a combined 227.9 billion won.

"No special momentum had flown into the Korean market as others in Asia and the U.S. were closed for the New Year's holiday," analyst Lee Kyoung-min from Daishin Securities said.

"Blue chips and market leaders in the secondary battery sector surrendered earlier gains and added downward pressures to the main bourse," he added.

Weak economic data also helped sour investor sentiment.

The country's exports reached an all-time high last year but suffered the largest-ever trade deficit of $47.2 billion on high energy prices, the industry ministry said Sunday.

Market heavyweights closed mixed, while auto shares gathered ground.

Samsung Electronics inched up 0.36 percent to 55,500 won, and SK hynix added 0.93 percent to 75,700 won.

Auto shares closed higher, as Washington's new guidance on the Inflation Reduction Act (IRA) offered relief to investors. The U.S. government has said Korean-made electric vehicles could be entitled for tax benefits if it is used for commercial purposes, such as leasing. Hyundai Motor gained 3.97 percent to 157,000 won, and sister affiliate Kia advanced 3.71 percent to 61,500 won.

Shares in cosmetic companies lost ground on the government's stricter Covid-19 measures against arrivals from China. Amorepacific was down 1.82 percent to 135,000 won, and LG Household & Health Care inched down 0.28 percent to 720,000 won.

The local currency closed at 1,272.6 won against the greenback, up 8.1 won from the previous session's close.

The Kosdaq decreased 7.78 points, or 1.15 percent, to close at 671.51 points.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds increased 6.5 basis points to 3.783 percent, and the yield on the benchmark 10-year government bonds increased 5.9 basis points to 3.878 percent.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]