You are here

Seoul: Shares reach 2-1/2 week low on growth worries; won lower


[SEOUL] South Korean shares sagged to a 2-1/2 week intraday low on Monday, in line with some regional peers as signs of slowing global factory activity crimped risk appetites.

The Korea Composite Stock Price Index (KOSPI) fell 0.77 per cent to 1,911.59 points as of 0210 GMT, its lowest level since Dec 18.

A string of manufacturing surveys released across Europe and Asia indicated sluggish growth for most, applying more pressure on major central banks to embark on additional stimulus measures.

"An extended fall in oil prices and jitters over Greece has raised the possibility of the euro zone slipping into deflation," said Hong Seok-chan, an analyst at Daishin Economic Research Institute.

Energy counters were battered as oil prices continued to plumb fresh multi-year lows, with SK Innovation slumping 3.5 per cent and LG Chem 2.8 per cent.

Risk aversion prompted heavy foreign sell-offs, as offshore investors sold a net 100.5 billion won (US$90.69 million) worth of shares on the main bourse.

Fourteen of the 17 KRX industry subindices were in negative territory while losing shares outnumbered winners by more than 2 to 1.

Telecoms and consumer staples were among the few bright spots as investors sought shelter from traditional defensive plays.

SK Telecom, South Korea's largest mobile services provider, rose 1.1 per cent and tobacco-maker KT&G gained 1.2 per cent.

The KOSPI 200 benchmark was down 0.8 per cent while the junior, tech-heavy KOSDAQ rose 0.85 per cent as market players shunned blue chips to take cover in small-caps.

The South Korean won fell on Monday, weighed by foreign outflows from the equity markets as well as wariness of market intervention by the financial authorities with the Japanese yen hovering just above a seven-year low.

The local currency was quoted at 1,110.6 to the dollar as of 0210 GMT, compared to 1,103.5 at the end of Friday's session.

March futures on three-year treasury bonds added 5 basis points to trade at 108.13.