Seoul: Shares hit 2-month low ahead of Fed decision; bond yields surge
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SOUTH Korea’s shares and currency weakened on Wednesday (Sep 21) as investors exercised caution ahead of the US Federal Reserve’s monetary policy meeting outcome, while its benchmark bond yield hit a decade high.
The benchmark Kospi ended down 20.64 points or 0.87 per cent at 2,347.21, marking the lowest close since Jul 15.
“Investor wariness was stronger than before, with US inflation data having been a shock last week,” said Choi Yoo-june, analyst at Shinhan Financial Investment.
The US Fed is expected to raise interest rates by at least 75 basis points at a meeting that ends later in the day, while its future policy projections are also being closely watched.
Further pressuring South Korea’s market, domestic exports fell in the first 20 days of September and the trade balance logged a deficit.
Meanwhile, the Bank of Korea denied a local report that a currency swap arrangement with the Fed would be announced as early as this week.
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Among heavyweights, technology giant Samsung Electronics fell 0.9 per cent while peer SK Hynix ended flat. Battery maker LG Energy Solution lost 0.83 per cent.
Of the total traded issues of 931, the number of advancing shares was 279.
Foreigners were net sellers of shares worth 273.3 billion won (S$276.7 million) on the main board.
The won was last quoted at 1,394.2 per dollar on the onshore settlement platform, 0.34 per cent lower than its previous close.
In offshore trading, the won was quoted down 0.2 per cent at 1,395.8 per dollar, while in non-deliverable forward trading, its 1-month contract was quoted at 1,394.2.
In money and debt markets, December futures on 3-year treasury bonds fell 0.04 point to 102.83.
The most liquid 3-year Korean treasury bond yield rose as much as 11.5 basis points to 3.904 per cent, hitting the highest since early August 2011. The benchmark 10-year yield rose as much as 11.6 basis points to 3.936 per cent, its highest since early April 2012. REUTERS
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