South Korea’s stocks closed low Friday, extending its losing streak amid mounting tensions over North Korea’s nuclear and missile programs.
The benchmark Kospi closed at 2,388.71, down 17.79 points or 0.74 percent from a day earlier, and the secondary Kosdaq also fell by 12.16 points or 1.84 percent to close at 648.95.
Domestic individuals and foreign investors net purchased 41.8 billion won ($36.8 million) and 27.9 billion won respectively on the main bourse, while institutions net sold 113.6 billion won.
The local currency closed at 1,136.5 won against the US dollar, up from 1,132.7 won on the previous day.
The market opened nearly flat earlier in the day, in the wake of overnight losses on Wall Street and soon took downturn following the brawl between North Korea and the United States.
Earlier in the day, North Korean media reported its leader Kim Jong-un as saying that he is considering the “highest-level action” in response to US President Donald Trump’s latest warning.
In his first address to the United Nations General Assembly on Tuesday, the US president claimed that he will have no other choice but to ”totally destroy” North Korea, if necessary to deter the latter’s military provocations.
Backing the state leader’s warning, North Korean Foreign Minister Ri Yong-ho mentioned the possibility of “carrying out a largest-ever hydrogen bomb test in the Pacific Ocean.”
The escalating battle of words between the communist regime and the world power sent out intimidating signals to buyers, despite President Moon Jae-in’s claim during a government investor relations event in New York earlier this week that “now is the time to invest in Korea.”
Among market heavyweights, Samsung Electronics maintained its uptrend, closing at 2.65 million won, up 0.38 percent from a day earlier.
SK hynix, a leading chipmaker recently coming under spotlight for its plausible acquisition of Toshiba, closed unchanged at 83,100 won.
Steel, chemical, and automobile industries mostly remained low, with top steelmaker Posco shedding 3.16 percent to 306,500 won and LG Chem falling 5.14 percent to 369,000 won.
Hyundai Motor gained slightly by 0.35 percent, while its secondary affiliated Kia Motors fell 0.65 percent.
Financial stocks, in contrast, remained on the uptrend in the wake of the US Federal Reserve’s recent move to retrench trillions of dollars in bonds and securities and implicitly gesture at hiking its key rate in December.
Shares of biggest financial players, including Shinhan Financial Group and KB Financial Group, went up from the previous day.
“(Federal Reserve Board Chair Janet) Yellen may have made dovish remarks at the press conference but the forewarning on the upcoming rate hike was certainly hawkish,” said Lee Eun-taek, a researcher at KB Securities.
Experts also predicted that banking stocks would continue on their current uptrend throughout the third quarter, citing the expansion of the loan market and the stabilization of the reserves.
“The top three financial groups (KB, Shinhan and Hana) already accumulated profits in the second quarter that amount to 113 percent from that of the same period last year,” said Kim Jae-woo, researcher at Samsung Securities.
“It is likely that leading banking groups will close in to their yearly target as of the end of the third quarter.”
By Bae Hyun-jung (email@example.com)