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Views Article – Sharenet Wealth

Asia, Forex

S.Korea stocks sag as Draghi comments dampen sentiment

* KOSPI index drops, foreigners net sellers * Korean won weakens versus U.S. dollar * South Korea benchmark bond yield falls SEOUL, July 26 (Reuters) – Round-up of South Korean financial markets: South Korean shares fell for a third session on Friday, as European Central Bank chief Mario Draghi’s comments disappointed investors hoping for a more dovish stance on monetary policy. The Korean won and the benchmark bond yield dropped. ** The ECB signalled its intention to explore monetary easing but left interest rates unchanged on Thursday, and Draghi sounded more upbeat on the economy than investors expected. ** He said the risk of a recession in the euro zone was “pretty low”, policymakers did not discuss interest rate cuts at Thursday’s meeting and they would wait for more data before “taking action.” ** The U.S. Federal Reserve is widely expected to cut interest rates next week to bolster the U.S. economy, even as the U.S. unemployment rate sits at its lowest in 50 years. ** Following ECB chief’s remarks, expectations of a rate cut by U.S. Federal Reserves have also declined, said Ryoo Yong-seok, an analyst at KB Securities. Second-quarter earnings of major South Korean firms also weighed on the markets, he added. ** South Korea’s July consumer sentiment fell to an eight-month low at 95.9, slowing from 97.5 in a month ago, the Bank of Korea said on Friday. ** As of 0218 GMT, the Seoul stock market’s main KOSPI index was down 13.12 points or 0.63% at 2,061.36 points. ** Foreigners were net sellers of 55.3 billion won ($46.67 million) worth of shares on the main board. ** The won was quoted at 1,184.9 per dollar on the onshore settlement platform , 0.29% lower than its previous close at 1,181.5. ** In offshore trading, the won was quoted at 1,185.3 per U.S. dollar, down 0.2% from the previous session, while in non-deliverable forward trading its one-month contract was quoted at 1,183.9 per dollar. ** MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.61%, after U.S. stocks dropped from record highs. Japanese stocks fell 0.52%. ** The KOSPI climbed 0.75% so far this year, but lost 1.4% in the previous 30 trading sessions. ** The current price-to-earnings 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 in the KOSPI index was 280.59 million shares and, of the total traded issues of 887, the number of advancing shares was 112. ** The won lost 5.8% against the U.S dollar so far this year. ** In money and debt markets, September futures on three-year treasury bonds dipped 0.01 points to 110.86, while the 3-month Certificate of Deposit rate was quoted at 1.54%. ** The most liquid 3-year Korean treasury bond yield fell by 0.9 basis points to 1.297%, while the benchmark 10-year yield dropped by 1.1 basis points to 1.422%. ($1 = 1,184.9000 won) (Reporting by Hayoung Choi, Editing by Sherry Jacob-Phillips)


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