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Seoul stocks dip 1.2 pct on escalating U.S.-China trade dispute

Stocks 16:15 May 16, 2019

SEOUL, May 16 (Yonhap) -- South Korean stocks sank 1.2 percent Thursday on the escalating trade war between the United States and China, with Washington vowing to ban foreign telecom equipment, analysts said. The Korean won again lost ground against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) plunged 25.09 points, or 1.2 percent, to close at 2,067.69. Trading volume was moderate at 733 million shares worth 5.96 trillion won (US$5 billion), with losers outpacing gainers 542 to 297.

U.S. President Donald Trump signed an executive order that centers on banning the use of foreign telecommunications devices, citing national security, apparently targeting Chinese brands such as Huawei.

"The tension is escalating between Washington and Beijing after Trump announced the order aimed at protecting U.S. telecommunication technology and services," said Yoon Jung-sun, a researcher at KB Securities Co.

Seoul shares started nearly flat over reports that Trump will delay his decision on imposing higher auto tariffs on imported cars and that there could be an exemption for South Korea from the penalties.

But the market went south in the afternoon session on expanded sell-offs by foreign investors.

Foreigners went on a selling spree with a net 467 billion won sold, while institutions dumped a net 37 billion won. Retail investors scooped up 409 billion won net.

Market kingpin Samsung Electronics dipped 2.35 percent to 41,550 won, and No. 2 chipmaker SK hynix lost 3.49 percent to close at 71,900 won. Major electronics firm LG Electronics moved down 2.07 percent to 71,000 won.

Samsung BioLogics dropped 3.39 percent to 299,500 won after prosecutors raided a task force office of Samsung Electronics as part of an investigation into allegations that Samsung Group may have been involved in accounting fraud by its biopharmaceutical unit.

Steelmakers lost ground, with industry leader POSCO falling 1.88 percent to 235,500 won and Korea Zinc decreasing 3.1 percent to 422,000 won. Hyundai Steel shed 1.64 percent to reach 41,950 won.

E-Mart, South Korea's leading discount chain operator, closed 5.48 percent lower at 146,500 won, a historic low, on weak first-quarter earnings.

Carmakers were mixed, with No.1 player Hyundai Motor dropping 0.39 percent to 127,500 won and auto parts maker Hyundai Mobis falling 0.23 percent to 212,500 won. The country's second-largest automaker, Kia Motors, edged up 0.95 percent to 42,350 won.

The local currency closed at 1,191.50 won against the U.S. dollar, down 2.90 won from the previous session. The figure reached 1,192.40 won against the greenback during the session, its lowest figure since the 1,202.00 won posted on January 11, 2017.

Seoul stocks dip 1.2 pct on escalating U.S.-China trade dispute - 1


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