[SEOUL] Seoul shares fell to a one-month low on Monday morning on growing prospects the US Federal Reserve will raise interest rates in September following a solid US jobs report.
Investors were also wary of China's slowing economy after data over the weekend showed further weakness in South Korea's largest export market.
The Korea Composite Stock Price Index (KOSPI) was down 0.7 per cent at 1,996.34 points as of 0214 GMT, after falling as much as 0.8 per cent to 1,993.96 points, the lowest since July 9.
"The US jobs data has bolstered market consensus of the Fed hiking rates in September, which pressured emerging markets including South Korea," said Park Seok-hyun, an analyst at Eugene Investment & Securities.
Chemical and refinery shares underperformed the broad market, down 5.2 per cent with 17 out of 20 shares in the sector falling, in line with a decline in crude oil futures.
Mr Park noted "chemical and refinery shares tracked oil prices, as a bullish dollar, slowdown of demand in China and supply issues added to expectations that a rebound in oil prices seems to be hard." LG Chem Ltd slid 7.4 per cent and Lotte Chemical Corp lost 6.2 per cent. Refinery SK innovation Co fell 4.5 per cent.
Coway Co Ltd plunged 11.5 per cent after local media reported top shareholder MBK Partners planned to sell its 30.9 per cent stake in the company.
Lotte Shopping Co fell as much as 8.3 per cent to 205,000 won, its lowest since April 29, 2009, after it unveiled late on Friday soft earnings for the April-June period.
Foreign investors were set to be net sellers for a fourth consecutive session, offloading a net 27.1 billion won (S$32.1 million) worth of shares in the main board in early trading.
On the currency market, the South Korean won edged up on the dollar, mirroring a modest fall in the greenback over the weekend as investors pared bullish bets following US non-farm payrolls data.
The won was up 0.2 per cent at 1,165.1 to the dollar from the previous close of 1,167.4.
"The dollar rose ahead of US jobs data as it had previously priced in the data," said Yuna Park, a foreign-exchange analyst at Dongbu Securities.
September futures on three-year treasury bonds were up 0.04 point at 109.23.