South Korean share prices rebound on eased Brexit woes

[THE INVESTOR] South Korean stocks snapped a six-day fall to close higher on June 17 on eased concerns over a British exit from the European Union. However, the rebound was still shaky amid lingering uncertainties in the global economy. The Korean won fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index edged up 1.41 points, or 0.07 percent, to close at 1,953.4. Trade volume was at 478.81 million shares worth 4.42 trillion won (US$3.78 billion), with winners outnumbering losers 440 to 372. 

The index got off to a strong start tracking overnight gains in Wall Street, but it lost some steam as foreigners turned toward safe havens.

U.S. stocks closed higher on Thursday after a pro-EU British lawmaker was shot dead in the street, causing a temporary suspension of campaigning for next week’s vote. A British exit from the EU, known as Brexit, is a key issue that rattled the global financial market all week.

“The Federal Reserve’s July meeting was widely expected by the market, so poll results over Brexit will overshadow concerns over the U.S. interest hike until the June 23 referendum,” Kim Sung-hwan, an analyst at Bookook Securities, told the press. “Investors are expected to prefer safe havens until uncertainties surrounding Brexit clear out.”

Foreigners sold a net 104.32 billion won, while institutions bought 59.62 billion won. Retail investors turned to net sellers to offload a net 7.6 billion won.

Samsung Electronics gained 1.21 percent to 1,426,000 won to support the broader market. Korea Electric Power Corp., the state-run power provider, rose 0.69 percent to 58,600 won.

Consumer goods and services stocks were in positive terrain as investors remained risk averse and piled up non-cyclical shares.BGF Retail, the nation’s leading convenience store chain, gained 2.72 percent to 207,500 won, and Lotte Shopping, the key retail unit of Lotte Group, inched up 0.24 percent to 208,500 won.

Top refiner SK Innovation shed 3.06 percent to 142,500 won, and No. 3 S-Oil edged down 0.51 percent to 78,600 won.

The local currency closed at 1,172.7 won against the U.S. dollar, down 1.3 won from the previous session‘s close.

The stock and foreign exchange markets were briefly jolted by a groundless rumor of North Korean leader Kim Jong-un’s death.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasury added 1.6 basis points at 1.334 percent, and the return on the benchmark five-year government bond increased 1.9 basis points to 1.402 percent.

(theinvestor@heraldcorp.com)