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Seoul: Stocks skid to 11-week low, won falls on fresh Trump warning to North Korea

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[SEOUL] South Korean shares fell to an 11-week low on Friday and the won extended this week's slide as President Donald Trump warned North Korea again not to strike Guam or US allies.

Mr Trump said on Thursday that threat earlier this week to unleash "fire and fury" on Pyongyang if it launched an attack may not have been tough enough, triggering fresh selling in global financial markets.

The Korea Composite Stock Price Index (Kospi) was down 1.3 per cent at 2,329.63 points by 0125 GMT, on track for a weekly loss of 2.7 per cent, its biggest since June 2016.

The index fell to 2,321.04 at one point, the lowest since May 24. It has been one of the world's best performing markets this year.

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The South Korean won skidded for a third straight sessions, hovering at a four-week low.

The won was down 0.4 per cent at 1,146.1 to the US dollar by mid-morning, its weakest since July 12 and closing in on its 200-day moving average resistance at 1,146.8.

It was down 0.4 per cent compared with Thursday's close of 1,142.0, on track for a weekly loss to nearly 2 per cent.

Foreign investors sold a net 116 billion won worth of Kospi shares, and were poised to be heavy sellers for the third consecutive session.

The spread on South Korea's five-year credit default swaps stood at 67.5 basis points and risk reversals in won options at 2.2 points.

REUTERS

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