Stocks finish down for third straight day on China's mineral control

Stocks ended lower for a third straight day Thursday as investors digested China's announcement to restrict exports of key minerals used in semiconductor production and the possibility of more U.S. rate hikes. The won fell against the dollar.

Screens in Hana Bank's trading room in central Seoul show the Kospi closing at 2,556.29 points on Thursday, down 0.88 percent, or 22.71 points, from the previous trading session. [YONHAP]

Stocks ended lower for a third straight day Thursday as investors digested China's announcement to restrict exports of key minerals used in semiconductor production and the possibility of more U.S. rate hikes. The won fell against the dollar.

The Kospi retreated 22.71 points, or 0.88 percent, to finish at 2,556.29. Trading volume was high at 524.7 million shares worth 10.2 trillion won ($7.83 billion) with decliners far outpacing gainers 751 to 151.

Foreigners sold a net 164.5 billion won worth of local equities, with institutions unloading a net 423.3 billion won. Individuals bought a net 551.2 billion won.

"U.S. chip stocks like Micron Technology that took a hit from China's export curbs announcement, obviously affected our tech stocks," Han Ji-young, an analyst at Kiwoom Securities said.

On Monday, China's commerce ministry said it will impose restrictions on exporting gallium and germanium used in chips, solar panels and EVs, starting Aug. 1. Exporters will have to apply for special state permits.

The U.S. Federal Reserve's June minutes released overnight reaffirmed the central bank's still-hawkish stance, Han added.

The Fed is widely expected to raise its interest rate in its policy meeting later in the month. It had put a pause on rate hikes last month after 10 consecutive increases in an aggressive monetary tightening campaign.

In Seoul, most big-cap shares drove the Kospi down.

Samsung Electronics slipped 0.56 percent to 71,600 won, and SK hynix dipped 2.49 percent to 113,800 won.

LG Energy Solution lost 0.35 percent to 565,000 won, and Posco Holdings closed down 2.23 percent to 394,000 won.

Auto stocks gained, with Hyundai Motor adding 0.49 percent to 206,500 won and Kia rising 1.02 percent to 89,000 won.

Naver spiked 4.83 percent to 195,500 won, and Kakao jumped 4.2 percent to 50,900 won.

The local currency ended at 1,300.90 won against the dollar, up 2.3 won from Wednesday's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds advanced 4.7 basis points to 3.672 percent, and the yield on the benchmark 10-year government bonds climbed 7.9 basis points to 3.936 percent.

BY SOHN DONG-JOO, YONHAP [sohn.dongjoo@joongang.co.kr]