Seoul: Shares fall after two sessions of sharp gains; won weakens
[SEOUL] South Korean shares dropped on Thursday after two sessions of sharp gains, as investors booked profits ahead of data expected to show a spike in US jobless claims due to the coronavirus crisis. The won weakened, while the benchmark bond yield fell.
The Seoul stock market's main Kospi closed down 18.52 points, or 1.09 per cent, at 1,686.24, having gained nearly 15 per cent in the past two sessions. But the index has fallen 23.27 per cent so far this year.
Foreigners were net sellers of 505.8 billion won (S$593.31 million) worth of shares on the main board.
South Korea's central bank said on Thursday that it is launching its own version of quantitative easing in efforts to calm money markets.
The South Korean government also said on Thursday that it plans to loosen the foreign exchange liquidity coverage ratio (LCR) for banks to encourage dollar supply into local markets.
Steep jumps in previous sessions prompted investors to take profits as they are cautious about the global economic outlook, especially ahead of a likely surge in US jobless claims, said Seo Sang-young, an analyst at Kiwoom Investment & Securities.
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The passing of the US stimulus bill in the Senate had a limited impact on equities, he said.
The number of Americans filing claims for unemployment benefits likely raced to as high as a record 4 million last week.
The US Senate unanimously passed a US$2 trillion stimulus bill, which is now sent to the House of Representatives for a vote on Friday.
The won ended trading at 1,232.8 per dollar on the onshore settlement platform, 0.24 per cent lower than its previous close at 1,229.9.
In offshore trading, the won was quoted at 1,232.6 per dollar, down 0.1 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,230.6.
The trading volume during the session in the KOSPI index was 982.94 million shares. Of the total traded issues of 904, the number of advancing shares was 734.
In money and debt markets, June futures on three-year treasury bonds rose 0.24 points to 111.36.
The most liquid three-year Korean treasury bond yield fell by 8.5 basis points to 1.061 per cent, while the benchmark 10-year yield fell by 15.0 basis points to 1.512 per cent.
REUTERS
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