Kospi drops 3.04% as won falls to 2-year low

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Kospi drops 3.04% as won falls to 2-year low

Local stocks extended their losing streak to a fourth day Thursday, plunging more than 3 percent, the sharpest drop in almost seven months ahead of two days of trade negotiations between Washington and Beijing. The Korean won also sank to the lowest point in over two years to the dollar.

The benchmark Kospi crashed a whopping 66 points, or 3.04 percent, to close at 2,102.01. Trading volume was high at 729 million shares worth 7.93 trillion won ($6.71 billion), with losers far outpacing gainers 785 to 83.


The fall was the steepest since Oct. 11 of last year, when the Kospi dropped 4.44 percent, and marks the lowest point since the 2,097.18 points posted on Jan. 15 of this year.

Seoul shares extended losses throughout the session after opening a tad lower in the morning, weighed down by looming concerns that the United States and China could fail to iron out their differences in the upcoming trade negotiations.

The United States has threatened to raise tariffs on $200 billion worth of Chinese products to 25 percent, from the current 10 percent, starting Friday.

China’s delegation is set to meet U.S. officials in Washington on Thursday to work on last-minute efforts to find common ground in their drawn-out trade negotiations.

“Overnight, Wall Street shares also traded higher during the session on hopes over the settlement between the United States and China, but they later closed mixed due to uncertainties over the deal,” said Seo Sang-young, a researcher at Kiwoom Securities.

Foreigners sold a net 186 billion won, with institutions also tossing a net 662 billion won. Retail investors scooped up a net 816 billion won.

Most shares lost ground. Samsung Electronics nose-dived 4.07 percent, to 42,450 won, and No. 2 chipmaker SK Hynix plunged 5.35 percent, to 76,000 won. Battery maker Samsung SDI dipped 7.11 percent, to 222,000 won.

Top automaker Hyundai Motor decreased 3.32 percent, to 131,000 won, and its sister company, Kia Motors, lost 2.05 percent, to 43,100 won. Auto parts maker Hyundai Mobis surrendered 4.57 percent, to 219,500 won.

The secondary Kosdaq fell 21.15 points, or 2.84 percent, to close at 724.22.

The won closed at 1,179.80 won against the dollar, up 10.40 won from the previous session, the lowest number in 28 months, as investors continued to seek safer assets amid uncertainties of the trade row of the world’s top two economies.

Bond prices ended higher. The yield on three-year bonds lost 0.9 basis points to 1.708 percent, and the return on 10-year bonds lost 1.7 percent to 1.861 percent.

BY KO JUN-TAE, YONHAP [ko.juntae@joongang.co.kr]
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