Views Article – Sharenet Wealth

Asia, Forex

S.Korean stocks, won wobble on recession, trade war concerns

* KOSPI index falls, foreigners net sellers

* Korean won weakens versus U.S. dollar

* South Korea benchmark bond yield falls

* For the midday report, please click

SEOUL, Aug 13 (Reuters) – Round-up of South Korean financial markets: South Korean shares ended lower on Tuesday as a drop in U.S. yield curve fuelled demand for safe-haven bets, adding pressure on the market, already hit by Sino-U.S. trade war and Japan’s export curbs. The Korean won and the benchmark bond yield fell.

** U.S. 30-year bond yields slid to their lowest since July 2016. U.S. long-term yields have fallen in six of the past nine sessions, reflecting investors’ diminished risk appetite. The yield spread between U.S. 2-year and 10-year notes, a closely watched metric, narrowed to 5.3 basis points, the smallest difference since at least 2010, according to Refinitiv data.

** Japan had said in July it would tighten restrictions on exports of high-tech materials to South Korea, a move seen as related to disputes over compensation for forced labour during World War Two.

** The Seoul stock market’s main KOSPI ended down 16.46 points or 0.85% at 1,925.83 points.

** Foreigners were net sellers of 174.6 billion won ($142.88 million) worth of shares on the main board. They were net sellers for a tenth consecutive session, marking the longest selling spree since January 2016.

** As the dollar strengthened amid a risk-off mood, foreigners have been hard to buy emerging-market stocks, said Kim Ji-hyung, an analyst at Hanyang Securities. Further, South Korean firms’ profit estimation has been sharply revised down, he added.

** South Korea’s construction stocks slumped after the government introduced a regulation to cool the housing market. The construction sub-index was the biggest percentage loser among KOSPI sub-indexes, with a 2.9% drop.

** Shares of E-Mart closed 6.6% firmer after the retailer announced its plan to sell assets and buy back shares.

** The won was quoted at 1,222.2 per dollar on the onshore settlement platform, 0.49% lower than its previous close at 1,216.2.

** In offshore trading, the won was quoted at 1,222.0 per U.S. dollar, down 0.3% from the previous session, while in non-deliverable forward trading its one-month contract was quoted at 1,222.6 per dollar.

** MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1.25%, after U.S. stocks stumbled . Japanese stocks dropped 1.11%.

** The KOSPI dropped 5.64% so far this year, but lost 8.8% 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 646.40 million shares and, of the total traded issues of 896, the number of advancing shares was 329.

** The won has lost 8.7% against the U.S dollar so far this year.

** In money and debt markets, September futures on three-year treasury bonds rose 0.13 points to 111.34, while the 3-month Certificate of Deposit rate was quoted at 1.49%.

** The most liquid 3-year Korean treasury bond yield fell by 2.5 basis points to 1.158%, while the benchmark 10-year yield fell by 4.5 basis points to 1.241%.

($1 = 1,222.0100 won)

(Reporting by Hayoung Choi, Editing by Sherry Jacob-Phillips)

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