South Korea: Stocks, won pare losses after BOK's rate hike

[SEOUL] South Korea's central bank raised interest rates for the first time in more than six years on Thursday - a vote of confidence that the economy is growing well above trend and no longer needs crisis-level monetary settings.

South Korea's Kospi stock index weakened, and the Korean won edged down in the local platform while bond yields rose.

At 01.17 GMT, the Kospi was down 9.09 points or 0.36 per cent at 2,503.81. The benchmark index dropped to a one-month low as large tech shares like Samsung Electronics and SK Hynix slid following big losses in US peers, but pared losses once the BOK's decision was known.

The won was quoted at 1,082 per dollar on the onshore settlement platform , 0.48 per cent weaker than its previous close at 1,076.8.

The currency slumped as foreign investors sold large volumes of local equities to take profits, while North Korea's missile launch on Wednesday had investors worried. Investors were cautiously waiting for the Bank of Korea governor's news conference later in the session.

In offshore trading, the won was quoted at 1,081.2 per US dollar, down 0 per cent from the previous day, while in one-year non-deliverable forwards it was being transacted at 1,077.05 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.41 percent, after US stocks ended the previous session with mild losses . Japanese stocks rose 0.15 per cent.

The Kospi is up around 24.0 per cent so far this year, and up by 1.21 per cent in the previous 30 days.

The current price-to-earnings ratio is 12.10, the dividend yield is 1.28 per cent and the market capitalisation is 1,242.04 trillion won.

The trading volume during the session on the Kospi index was 94,890,000 shares, and of the total traded issues of 862, the number of advancing shares was 383.

Foreigners were net sellers of 150,088 million won worth of shares.

The US dollar has fallen 10.37 per cent against the won this year. The won's high for the year is 1,075.71 per dollar on November 29 2017 and low is 1,211.8 on January 3 2017.

In money and debt markets, December futures on three-year treasury bonds fell 0.03 points to 108.12.

The Korean 3-month Certificate of Deposit benchmark rate was quoted at 1.51 per cent compared with a previous close of 1.5 per cent, while the benchmark 3-year Korean treasury bond yielded 2.118 per cent, higher than the previous day's 2.11 per cent.

REUTERS