Seoul: Shares end lower; domestic bond yield hits over 8-year high

SOUTH Korean shares tracked losses on Wall Street to close lower on Tuesday (Jun 7), while worries about persistent inflation and policy tightening lifted local treasury yields to a more than 8-year high. The Korean won, too, weakened.

The benchmark Kospi ended 44.31 points, or 1.66 per cent, lower at 2,626.34.

South Korea’s 10-year treasury yield rose by more than 13 basis points to 3.534 per cent — the highest since April 2014.

Among heavyweights, technology giant Samsung Electronics fell 1.95 per cent, peer SK Hynix slid 2.8 per cent, and battery maker LG Energy Solution dropped 1.26 per cent.

The Kospi pared earlier losses towards the afternoon but the prospect of a faster-than-expected US monetary policy tightening is pushing US treasury yields higher and adding volatilities in the global market, said Lee Kyung-min, an analyst at Daishin Securities.

Foreigners were net sellers of 205 billion won (S$224.6 million) worth of shares on the main board.

The won was quoted at 1,257.7 per dollar on the onshore settlement platform, down 1.19 per cent.

In offshore trading, the won was quoted at 1,257.5 per dollar, down 0.2 per cent, while in non-deliverable forward trading, its 1-month contract was quoted at 1,257.

The Kospi has fallen 11.8 per cent so far this year, but lost 1.8 per cent in the previous 30 trading sessions.

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The trading volume was 517.04 million shares. Of the total traded issues of 929, the number of advancing shares was 163.

The won has lost 5.5 per cent against the dollar so far this year.

In money and debt markets, June futures on 3-year treasury bonds fell 0.31 point to 104.82.

The most liquid 3-year Korean treasury bond yield rose by 10.5 basis points to 3.225 per cent. REUTERS