Seoul: Shares slip as US bond yields offset vaccine optimism

[SEOUL] South Korean shares ended lower on Wednesday, as worries over rising US Treasury yields outweighed upbeat Chinese PMI data and hopes of vaccine- and stimulus-led recovery. The Korean won and the benchmark bond yield strengthened.

The Kospi closed down 8.58 points, or 0.3 per cent, at 3,061.42, after gaining as much as 0.8 per cent in early trade.

For the month, the index gained 1.6 per cent, extending the buying spree to a fifth straight month.

Chip giants Samsung Electronics and SK Hynix slipped 1 per cent and 1.5 per cent, respectively, while battery maker LG Chem ended 0.4 per cent lower.

The 10-year Treasury yields rose as high as 1.746 per cent on Wednesday from 1.708 per cent in the previous session. US Treasury yields skyrocketed 83 basis points just this quarter, the biggest increase in over a decade.

That dented sentiment even as China's manufacturing activity expanded at the fastest pace in three months, underpinning signs of a solid economic recovery.

Back home, factory output in February grew at its fastest pace in eight months, mostly due to a boost in semiconductor and chemicals production.

Meanwhile, US President Joe Biden is set to outline later on Wednesday how he intends to pay for a US$3-4 trillion infrastructure plan.

Foreigners were net sellers of 296.7 billion won (S$353.4 million) worth of shares on the main board.

The won ended at 1,131.8 per US dollar on the onshore settlement platform, 0.16 per cent higher than its previous close at 1,133.6.

It edged 0.7 per cent lower on a monthly basis, extending losses to a third straight month.

In offshore trading, the won was quoted at 1,131.6 per US dollar, up 0.1 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,131.4.

The benchmark 10-year yield rose by 0.6 basis points to 2.069 per cent.