[THE INVESTOR] South Korea’s cosmetics stocks took sharp losses in fear that China could impose sanctions following Korea’s decision to deploy the Terminal High Altitude Area Defense system.

Industry heavyweight AmorePacific dropped 2.28 percent to 364,000 won (US$327.16) while its smaller rival LG Household & Health Care shed 4.26 percent to 922,000 won in early trading on Aug. 5.

TonyMoly slid 3.36 percent, Cosmax shed 6.07 percent and Hankook Cosmetics lost 3.54 percent.
 


The drop comes as investors are worried about Seoul’s worsening relations with Beijing -- the biggest market for Korean beauty products.

“Investor sentiment towards stocks which heavily rely on exports to China is increasingly bearish as Beijing seems to have started to slap implicit restrictions on the firms’ businesses regarding the THAAD issue,” said Chung Seok-hoon, an analyst at Korea Investment & Securities.

China slammed the bilateral decision between Seoul and Washington to deploy the advanced US anti-missile system, saying it could pose a threat to China’s security interests.

By Park Han-na (hnpark@heraldcorp.com)