Seoul: Shares plunge on recession woes; won touches 13-year low

SOUTH Korean shares closed nearly 3 per cent lower on Wednesday (Jun 22) to the lowest since November 2020 as investor sentiment remained fragile amid fears over recession. The Korean won weakened to a nearly 13-year low, while the benchmark bond yield fell.

The benchmark Kospi ended down 66.12 points or 2.74 per cent at 2,342.81.

It was something similar to panic-selling amid weak sentiment despite stocks having already fallen into their over-sold territories, Eugene Investment and Securities analyst Huh Jae-hwan said, adding that investors are yet to see any signs of turnaround amid market’s pricing in of recession worries.

Of the total traded issues of 930 shares on the benchmark Kospi, only 40 advanced.

Among the heavyweights, technology giant Samsung Electronics fell 1.54 per cent and peer SK Hynix dropped 3.15 per cent, while battery maker LG Energy Solution slipped 2.91 per cent.

Shipbuilder Samsung Heavy Industries ended flat after rising as much as 5.06 per cent on winning orders worth 3.9 trillion won (S$4.2 billion).

Aerospace stocks dropped with Korea Aerospace Industries and Hanwha Aerospace down 3.92 per cent and 9.49 per cent, respectively, as investors locked in profits after the country’s successful launch of its domestically produced rocket on Tuesday.

Foreigners were net sellers of 320.7 billion won worth of shares on the main board.

The won was last quoted at 1,297.3 per dollar on the onshore settlement platform, 0.29 per cent lower than its previous close, after hitting the lowest since Jul 14, 2009 at 1297.9.

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In offshore trading, the won was quoted down 0.4 per cent at 1,297.3 per dollar, while in non-deliverable forward trading its 1-month contract was quoted at 1,298.6.

In money and debt markets, September futures on 3-year treasury bonds rose 0.41 point to 103.43 in late afternoon trade.

The most liquid 3-year Korean treasury bond yield fell 10.7 basis points to 3.556 per cent, while the benchmark 10-year yield slipped 6.9 basis points to 3.707 per cent. REUTERS