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Seoul stocks snap 3-day winning streak, Korean won again hits multiyear low

Stocks 16:03 August 13, 2019

By Joo Kyong-don

SEOUL, Aug. 13 (Yonhap) -- Seoul stocks closed lower Tuesday, ending a three-day winning streak, amid growing trade tension between the United States and China and geopolitical risks around the globe, including massive protests in Hong Kong.

The Korean won hit the lowest level to the U.S. dollar in over three years amid a growing appetite for safer assets and mounting concerns over an economic slowdown.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 16.46 points, or 0.85 percent, to 1,925.83. Trading volume was moderate at 646 million shares worth 4.22 trillion won (US$3.4 billion), with losers outnumbering gainers 512 to 329.

Investor sentiment was spooked by the mounting trade war between the world's two largest economies.

Major indices dropped more than 1 percent in the U.S. on Monday due to growing fears that the American-Sino trade feud could turn the economic slowdown to a recession. Goldman Sachs said it no longer expects a trade deal before the 2020 U.S. presidential election.

"The trade row is definitely negative for the Korean market that relies on exports," said Seo Sang-young, an analyst at Kiwoom Securities.

Analysts said emerging geopolitical risks, such as pro-democracy protests in Hong Kong that led to an airport shutdown, as well as primary election results in Argentina that triggered a massive sell-off in the peso, also appear to have dampened investor sentiment.

"The worsened situation in Hong Kong could impact all Asian markets since Hong Kong is considered a financial hub in the region," said Park Sang-hyun, an analyst at Hi Investment & Securities.

Retail investors bought a net 155 billion won worth of shares, while institutions dumped a net 4 billion won. Foreigners offloaded a net 174 billion won.

Most large-cap stocks fell across the board.

Market bellwether Samsung Electronics dipped 1.6 percent, while LG Electronics shed 1.16 percent. No. 2 chipmaker SK hynix stayed flat at 74,500 won.

Auto shares were weak. No. 1 automaker Hyundai Motor decreased 1.53 percent, while its auto parts-making affiliate Hyundai Mobis slid 1.47 percent. Kia Motors remained unchanged at 43,750 won.

POSCO, South Korea's top steelmaker, dropped 1.44 percent and LG Chem, the nation's top chemical company, dived 1.59 percent.

The local currency closed at 1,222.20 against the U.S. dollar, sharply down 6 won from the previous session's close, marking its lowest point since March 2, 2016, when the won closed at 1,227.5 won per greenback.

"The combination of the American-Sino trade war and protests in Hong Kong propelled traders to sell the local currency," said Kim Doo-un, an analyst at KB Securities.

kdon@yna.co.kr
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