Seoul shares dip over 0.9 pct on concerns over value-up program, strong dollar; won at 17-month low

South Korean stocks dipped more than 0.9 percent Friday on concerns over the government’s corporate value-up program following the general elections and weak foreign purchase sparked by the strong dollar. The Korean won sharply fell to the lowest point in 17 months against the U.S. dollar.

The benchmark Korea Composite Stock Price Index plunged 25.14 points, or 0.93 percent, to close at 2,681.82.

Trade volume was moderate at 501.3 million shares worth 11.7 trillion won (US$8.5 billion), with decliners outpacing gainers 507 to 368.

Retail and foreign investors bought local shares worth 589.8 billion won and 16.5 billion won, respectively, while institutions unloaded stocks worth 636.1 billion won.

On Thursday (U.S. time), the Nasdaq Composite jumped 1.7 percent and the S&P 500 rose 0.7 percent on a tech rally, while the Dow Jones Industrial Average was almost flat.

Apple soared 4.3 percent, Nvidia surged 4.1 percent, and Amazon climbed 1.7 percent.

Lee Kyoung-min, an analyst at Daishin Securities, said the strong dollar had a negative impact on foreigners’ purchase of South Korean stocks and concerns over the government’s corporate value-up program dragged down low price-to-book ratio (PBR) stocks following the opposition party’s victory in the parliamentary elections earlier this week.

The KOSPI’s growth has been attributed to the low PBR stocks, including auto and financial shares, in recent months.

Lee also said the release of a weaker-than-expected U.S. March producer price index report gave some calm to investors, but it had little impact on growing expectations the Federal Reserve may keep its rates elevated for longer.

Earlier in the day, the Bank of Korea also froze its key rate at 3.5 percent for the 10th straight session, sapping investors’ appetite.

In Seoul, most of the big-cap stocks went south.

Market bellwether Samsung Electronics lost 0.48 percent to 83,700 won, and No. 2 chipmaker SK hynix decreased 0.53 percent to 187,400 won.

Leading battery maker LG Energy Solution dipped 2.24 percent to 371.500 won, Samsung SDI dropped 1.6 percent to 401,000 won, and POSCO Future M plummeted 5.13 percent to 268,000 won.

Auto and financial shares also lost ground.

Top automaker Hyundai Motor pulled back 1.24 percent to 238,000 won, its smaller affiliate Kia retreated 1.7 percent to 109,800 won, and its auto parts making affiliate Hyundai Mobis plunged 4.18 percent to 240,500 won.

KB Financial Group and Shinhan Financial Group both lost more than 2.9 percent to close at 66,300 won and 41,850 won, respectively. Hana Financial Group dived 5.17 percent to 55,000 won.

Bio firm Celltrion and internet portal operator Naver were among the few gainers, advancing 1.5 percent and 1.25 percent to 182,200 won and 185,900 won, respectively. LG Chem also climbed 1.55 percent to 393,000 won.

The local currency ended at 1,375.40 won against the greenback, down 11.30 won from the previous session’s close, marking the lowest since Nov. 10, when the won closed at 1,377.50 to the greenback.

Bond prices, which move inversely to yields, increased. The yield on three-year Treasurys dropped 6.3 basis points to 3.403 percent, and the return on the benchmark five-year government bonds retreated 5.7 basis points to 3.454 percent.