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Seoul stocks end 9-day winning streak ahead of Fed outlook, won falls

All News 16:35 June 11, 2020

SEOUL, June 11 (Yonhap) -- South Korean shares closed lower to end its nine-day winning-streak on Thursday, with a gloomy outlook from the U.S. Fed for the pandemic-hit economy spooking investors. The Korean won fell against the U.S. greenback.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 18.91 points, or 0.86 percent, to close at 2,176.78. Trading volume was high at about 814 million shares worth some 16.6 trillion won (US$13.7 billion), with losers outnumbering gainers 660 to 218.

The index opened in negative terrain, tracking overnight losses on Wall Street that followed the rather disappointing outcome of the U.S. Federal Open Market Committee (FOMC) meeting.

Fed Reserve Chairman Jerome Powell noted the COVID-19 pandemic may have long-term drawbacks for the U.S. economy, undermining hopes for a speedy economic rebound.

His remarks also cast a shadow over South Korea's export-dependent economy.

South Korea's exports dropped for 14 consecutive months between December 2018 and January 2020, partly due to the prolonged U.S.-China trade dispute.

The United States, along with China, are South Korea's largest trade partners.

"Now that the FOMC event is over, investors seem to be switching to profit-taking," Samsung Securities analyst Seo Jung-hun said, citing noticeable drops among economy-sensitive shares.

Seo said, "The FOMC has given a clear sign that the key rate will stay low for a long time. Such a message is likely to increase sell-offs among large-cap growth stocks under high valuation pressures, such as Samsung Electronics and bank shares, in contrast to bio and internet shares."

Institutions offloaded a net 1.18 trillion won, the largest single-day sell-off since 1.24 trillion won tallied on May 31, 2018.

Retail investors, on the other hand, scooped up a net 1.27 trillion won, the largest amount since 1.7 trillion won on May 4. Foreigners dumped a net 116.1 billion won.

Most large caps closed in negative terrain.

Market bellwether Samsung Electronics lost 1.44 percent to 54,300 won, with No. 2 chipmaker SK hynix tumbling 2.53 percent to 88,500 won.

Top automaker Hyundai Motor plunged 2.69 percent to 108,500 won, and its smaller affiliate Kia Motors lost 1.11 percent to 35,700 won.

Pharmaceuticals fared far better, with heavyweight Celltrion soaring 7.26 percent to 288,000 won and industry leader Samsung BioLogics spiking 6.11 percent to 747,000 won.

The local currency closed at 1,196.40 won against the U.S. dollar, down 5.20 won from the previous session's close.

jwc@yna.co.kr
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