Views Article – Sharenet Wealth

Asia, Forex

S.Korean stocks slip on downbeat quarterly earnings

* KOSPI index declines, foreigners net buyers

* Korean won weakens versus U.S. dollar

* South Korea benchmark bond yield falls

* For the midday report, please click

SEOUL, July 25 (Reuters) – Round-up of South Korean financial markets:

** South Korean shares slid on Thursday as tepid corporate earnings and murky outlook by a major chemical firm deflated sentiment, while chip giants rose after SK Hynix revealed its plan to cut investment and production to support a modest rebound in chip demand. The won and the benchmark bond yield fell.

** South Korean markets are palpably underperforming global markets due to a sluggish economy and weak corporate earnings, said Lee Young-gon, an analyst at Hana Financial Investment.

** South Korea’s economy swung back to growth in the second quarter, dodging a technical recession, although the expansion was mostly driven by government spending, suggesting the central bank may need to cut rates again to stoke demand.

** Shares of LG Chem closed 5% down after the company lowered profit margin estimate for its battery business and posted a 62% fall in its second-quarter operating profit. This sent the chemical sub-index 2% lower, making it the biggest percentage loser among KOSPI sub-indexes.

** SK Hynix said it would cut DRAM output capacity and investment going forward, soothing investor worries on memory chip supply glut. This drove its shares up 2%, as well as shares in Samsung Electronics which ended up 1.7%.

** Shares of Hyundai Mobis jumped 5.6% to their highest level since May last year, after the company posted second-quarter results above market consensus.

** Shares of web portal operator Naver Corp surged 8.5%, marking their highest since early March, after the company said it would spin-off its online payment system business.

** The Seoul stock market’s main KOSPI index closed down 7.81 points or 0.38% at 2,074.49.

** Foreigners were net buyers of 70.7 billion won ($59.84 million) worth of shares on the main board.

** The won was quoted at 1,181.5 per dollar on the onshore settlement platform, 0.30% lower than its previous close at 1,177.9.

** In offshore trading, the won was quoted at 1,181.4 per U.S. dollar, down 0.3% from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,180.2 per dollar.

** MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.25%, after U.S. stocks registered record closing highs. Japanese stocks rose 0.22%.

** The KOSPI has risen 1.64% so far this year, but lost 1.3% in the previous 30 trading sessions.

** The current PE ratio is 12.10, the dividend yield is 1.28% and the market capitalisation is 1,242.04 trillion won.

** The trading volume during the session on the KOSPI index was 590.85 million and, of the total traded issues of 894, the number of advancing shares was 152.

** The won has lost 5.6% against the U.S. dollar so far this year.

** In money and debt markets, September futures on three-year treasury bonds rose 0.06 points to 110.85, while the 3-month Certificate of Deposit rate was quoted at 1.55%.

** The most liquid 3-year Korean treasury bond yield fell by 1.8 basis points to 1.304%, while the benchmark 10-year yield fell by 3.7 basis points to 1.429%. ($1 = 1,181.5700 won) (Reporting by Hayoung Choi; editing by Gopakumar Warrier)

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