Seoul: Won, shares drop as Dec Fed hike views gain traction

[SEOUL] South Korea's currency and stock market both weakened on Monday morning as better-than-expected US jobs data increased expectations the US Federal Reserve will tighten monetary policy in December.

The South Korean won fell 1.0 per cent to 1,152.7 per dollar as of 0233 GMT. It touched a near one-month low by mid-morning, its weakest level since Oct. 14.

The Korea Composite Stock Price Index (KOSPI) was down 0.3 per cent at 2,034.52 points, following three straight sessions of weaker closes. Losers outnumbered gainers by 4-to-1.

Data on Friday showed non-farm payrolls increased 271,000 in October, the largest gain since last December while the unemployment rate fell to 5.0 per cent, the lowest since April 2008.

"The advancing dollar index is expected to continue pressuring down on emerging currencies, at least until year-end," said Hong Seok-chan, a foreign exchange analyst at Daishin Economic Research Institute.

Kim Yong-goo, a stock analyst at Samsung Securities, said investors were likely to eye a meeting of finance ministers at the G20 meeting in Turkey, which kicks off later this week.

Those representing emerging markets are likely to voice their opinions on their countries' respective currencies, Kim said.

Steelmaker POSCO sagged 1.7 per cent, and Samsung Heavy Industries Co Ltd lost 5.0 per cent.

The sub-index for pharmaceutical shares outperformed the broad market, up 2.7 per cent. Hanmi Pharm Co Ltd rose 16.5 per cent, as it found continued support from a massive deal it secured with France's Sanofi last week.

Foreign investors sold 7.6 billion Korean won net worth of KOSPI shares near mid-session, weighing on the index.

December futures on three-year treasury bonds shed 0.22 points at 109.12.

REUTERS