Seoul: Shares end at 20-month low on recession worries

SOUTH Korean shares closed more than 2 per cent lower on Wednesday (Jul 6) at their lowest since late-October 2020, as recession worries outweighed hopes for easing inflationary pressures. The won hit a 13-year low, while the benchmark bond yield dropped.

The benchmark Kospi ended down 49.77 points or 2.13 per cent at 2,292.01, the lowest close since Oct 30, 2020.

The local market seemed to react positively to a fall in oil prices early in the session, but worries of economic recession deepened, with investors bracing for the earnings season, said Seo Jung-hun, analyst at Samsung Securities.

Among heavyweights, technology giant Samsung Electronics fell 1.4 per cent and peer SK Hynix lost 0.43 per cent.

LG Energy Solution rose 2.49 per cent after reports that the battery maker will sign a supply deal worth a trillion won (S$1.1 billion) with Isuzu Motors in Japan.

SK IE Technology dropped 14.35 per cent to a record low after private equity fund Premier Superior’s clean-up of 283 billion won worth of stake.

Foreigners were net sellers of 314 billion won worth of shares on the main board.

The won was last quoted at 1,306.3 per dollar on the onshore settlement platform, down 0.46 per cent, after hitting the lowest since Jul 13, 2009 at 1311.

In offshore trading, the won was quoted up 0.1 per cent, while in non-deliverable forward trading its 1-month contract was quoted at 1,306.3.

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In money and debt markets, September futures on 3-year treasury bonds rose 0.36 point to 104.77 in late afternoon trade.

The most liquid 3-year Korean treasury bond yield fell by 12.5 basis points to 3.19 per cent, hitting the lowest since early June, while the benchmark 10-year yield fell by 13.4 basis points to 3.254 per cent, the lowest since May 31. REUTERS