Seoul: Shares drop 2% on recession worries, won weakens

SOUTH Korean shares fell 2 per cent on Monday (Jun 20), underperforming most Asian peers to end at a 19-month low, as investor sentiment dampened on global economic recession concerns. The won touched its 27-month low, while the benchmark bond yield inched down.

The benchmark Kospi ended down 49.9 points, or 2.04 per cent, at 2,391.03, its lowest close since Nov 4, 2020.

Technology giant Samsung Electronics and peer SK Hynix fell 1.84 per cent and 1.97 per cent, respectively, dragging the index lower. Battery maker LG Energy Solution also dropped 3.29 per cent.

Foreigners were net sellers of 662.4 billion won (S$709.9 million) worth of shares on the main board.

Only 62 of the total 930 traded issues advanced.

Worries of economic recession intensified globally, but local stock losses were much bigger than broader Asian markets, said Daishin Securities’ analyst Lee Kyoung-min, adding, a heavy sell-off by foreigners and seemingly forced-selling of retail investors’ leveraged holdings further weighed on the market.

South Korea’s finance minister reiterated the forex authorities’ recent stance that they would take necessary steps to stabilise the currency market in case of excessive volatility.

The won was last quoted at 1,292.4 per dollar on the onshore settlement platform, 0.39 per cent lower than the previous session and its lowest close since Jul 14, 2009. During the session, the currency touched its lowest intraday level since Mar 19, 2020 at 1295.3.

In offshore trading, the won was quoted flat at 1,291.8 per dollar, while in non-deliverable forward trading its 1-month contract was quoted at 1,291.4.

SEE ALSO

Seoul: Shares mark worst week in 5 months on recession fears

In money and debt markets, June futures on 3-year treasury bonds rose 0.04 point to 103.65 in late afternoon trade.

The most liquid 3-year Korean treasury bond yield fell by 1.1 basis points to 3.724 per cent, while the benchmark 10-year yield fell by 1.4 basis points to 3.781 per cent. REUTERS