Stocks decline on earnings news and Fed wait

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Stocks decline on earnings news and Fed wait

Stocks closed lower for the second consecutive session Wednesday as investors digested a slew of corporate earnings and awaited a U.S. rate decision, analysts said. The won weakened against the dollar.

The benchmark Kospi dropped 12.42 points, or 0.59 percent, to close at 2,080.27. Trading volume was moderate at 410.99 million shares worth 5 trillion won ($4.3 billion), with losers overwhelming gainers 565 to 263.


The market sentiment was muted on disappointing earnings reports by local companies, while investors remained cautious ahead of the Federal Reserve’s rate decision later in the day.

“Investors are taking a cautious approach ahead of the Federal Reserve’s policy meeting, while locking in profits from the recent rally,” Seo Sang-young, an analyst at Kiwoom Securities, said.

Institutions turned to net sellers, dumping 225.6 billion won worth of shares, while foreigners picked up a net 11.9 billion won. Retail investors bought a net 154.17 billion won.

Tech shares declined. Samsung Electronics fell 1.37 percent to 50,400 won, and chipmaker SK Hynix shed 1.81 percent to 81,500 won.

Auto shares were mixed. Hyundai Motor remained flat at 122,500 won, but Kia Motors edged down 0.94 percent to 42,300 won. Auto parts maker Hyundai Mobis inched up 0.21 percent to 238,000 won.

Korea Electric Power, the state-run utility firm, advanced 2.99 percent to 25,850 won after its CEO Kim Jong-gap said he will push to phase out temporary discounts on charging costs for electric vehicles and other uses to cut snowballing deficits.

Hyundai Steel, the nation’s No. 2 steelmaker, sank 2.88 percent to 32,000 won after its net losses widened in the third quarter from a year earlier due to higher raw material costs.

Posco shed 0.47 percent to 211,000 won and Korean Air Lines dropped 1.41 percent to 24,450 won.

Pharmaceutical firms traded in negative terrain, with Celltrion losing 0.73 percent to reach 204,000 won. Samsung BioLogics inched down 0.87 percent to 397,000 won.

Naver gained 0.98 percent to close at 154.500, while Kakao lost 1.08 percent to 138,000.

The secondary Kosdaq dropped 3.26 points, or 0.50 percent, to close at 655.04.

The won closed at 1,168.1 won against dollar, up 5.1 won from Tuesday’s close.

The yield on three-year bonds fell 1.2 basis points to 1.489 percent, and the yield on 10-year bonds dropped 0.8 basis points to 1.83 percent.

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