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South Korea: Stocks at over 3-week low on China worries; won steady
[SEOUL] South Korean shares edged down to more than a three-week intraday low early on Monday as retailers and travel agencies ran into trouble in China over Seoul's decision to deploy a US missile defence system.
South Korea's Lotte Group, the country's fifth largest conglomerate, said on Monday four of its retail stores in China were closed after inspections by authorities, dragging shares of Lotte Shopping down by 4 per cent in early trade, before a recovery brought the share back to stand just under 1 per cent down as mid-session approached.
The firm's difficulties in China came after affiliate Lotte International approved a South Korean land swap last week to allow the US Terminal High Altitude Area Defence (Thaad) system, which is being installed in response to North Korea's missile threat.
The Korea Composite Stock Price Index (KOSPI) was down 0.1 per cent at 2,077.35 points as of 0239 GMT. The index reached as low as 2,067.68, its weakest since February 9.
Jeong Dong Hyu, a stock analyst at Shinyoung Securities said that growing tension between Seoul and Beijing will take a toll on South Korean shares equities unless the issue is resolved.
"There are two scenarios. Either completing the deployment or the next administration nullifying the whole process," added Mr Jeong.
North Korea fired four ballistic missiles early in the session, three of which landed in Japan's exclusive economic zone, but had little impact on the markets.
South Korea's finance ministry also said in a statement that the missile launch had no significant effect on stocks and currency markets.
Some of defence-related company shares rose. Firstec was up nearly 1 per cent, while Korea Aerospace rose 1.6 per cent.
Offshore investors were set to be small net buyers of KOSPI shares near mid-session.
Decliners outnumbered advancers 509 to 297.
The South Korean won was steady, standing at 1,155.3 to the dollar, up 0.1 per cent compared to Friday's close of 1,156.1.
March futures on three-year treasury bonds shed 0.01 point to 109.40.