Seoul: Shares, won slump on record trade deficit

SOUTH Korean shares and the won slumped on Thursday (Sep 1), as the country’s trade deficit nearly doubled in August to a record monthly amount, while the benchmark bond yield rose.

The benchmark Kospi ended down 56.44 points or 2.28 per cent at 2,415.61, its lowest closing level since Jul 27 and biggest daily fall since Jun 22.

South Korea’s export growth slowed in August with weak demand from China and for semiconductors, but imports accelerated due to high energy prices, widening the trade deficit to a record amount.

The country’s factory activity shrank in August by the sharpest pace in 2 years, a private-sector survey showed.

US order to cease major chip producers’ sales to China weighed on local tech shares as well, said Lee Kyoung-min, analyst at Daishin Securities.

Among heavyweights, technology giant Samsung Electronics and peer SK Hynix dropped 2.18 per cent and 2.94 per cent, respectively. Battery maker LG Energy Solution inched up 0.11 per cent.

Only 78 shares advanced, out of total 930 traded issues.

Foreigners were net sellers of shares worth 355.6 billion won (S$367.4 million) on the main board.

The won ended 1.28 per cent lower at 1,354.9 per dollar on the onshore settlement platform, after touching its lowest since Apr 29, 2009 at 1,355.1.

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In offshore trading, the won was quoted down 1 per cent at 1,354.7 per dollar, while in non-deliverable forward trading its 1-month contract was quoted at 1,354.

In money and debt markets, September futures on 3-year treasury bonds fell 0.24 point to 103.24 in late afternoon trade.

The most liquid 3-year Korean treasury bond yield rose by 7.8 basis points to 3.767 per cent, while the benchmark 10-year yield rose by 4.4 basis points to 3.791 per cent. REUTERS