Kospi drops to lowest point since May 2017

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Kospi drops to lowest point since May 2017


Korean shares plunged to their lowest point this year on Wednesday as concerns of an economic downturn swept the market. The local currency depreciated against the U.S. dollar.

The benchmark Kospi fell 25.22 points, or 1.12 percent, to close at 2,228.61, extending its losing streak to seven straight sessions. The closing price was the lowest since May 2, 2017, when the main bourse finished at 2,219.67.

Trading volume was moderate at 348.9 million shares worth 6.3 trillion won ($5.56 billion).

Foreigners led the sharp decline, dumping a net 230.2 billion won worth of local shares, while institutions scooped up a net 116 billion won and individuals bought a net 100 billion won.

Analysts said pessimistic sentiment overwhelmed the market after the International Monetary Fund lowered its growth outlook for Korea to 2.8 percent from 3 percent on Tuesday. The Korean market was closed on Tuesday for Hangul Day.

“The downgrade by the IMF pushed investors into a corner as they have been affected hard by lingering overseas issues like U.S.-China trade rows,” said Kim Seong-hwan, an analyst from Bookook Securities. “The problem is that there is no good news that can lead to a turnaround in the near future.”

Market heavyweights finished in negative terrain across the board.

Chipmaker SK Hynix, the second-biggest share on the Kospi, fell 1.26 percent to 70,300 won, and LG Electronics slid 3.83 percent to 65,200 won.

Lotte Shopping, a leading retailer, skidded 1.22 percent to 202,500 won, and its rival Shinsegae decreased 1.83 percent to 295,500 won.

Top cosmetics maker Amorepacific slumped 4.93 percent to 212,000 won, and LG Household & Health Care tumbled 4.2 percent to 1,140,000 won.

The secondary Kosdaq also fell 19.65 points, or 2.56 percent, to end at 747.50.

The tech and bio-heavy index also closed at the lowest point of this year, dragged down by dips in stocks related to inter-Korean cooperation due to uncertainties surrounding the second summit between the United States and North Korea.

The Korean won closed at 1,134.0 won against the U.S. dollar, up 1.3 won from the previous trading session. The won has been on a steady decline for six straight trading days.

Bond prices, which move inversely to yields, ended sharply higher. The yield on three-year bonds fell 3.2 basis points to 2.06 percent, and the return on 10-year bonds moved down 4.0 basis points to 2.41 percent.

BY CHAE YUN-HWAN, YONHAP [chae.yunhwan@joongang.co.kr]
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