Seoul: Stocks close over 1% lower on record selling by foreigners

[SEOUL] South Korean shares closed more than 1 per cent lower on Monday, erasing previous session's gains, on a huge foreign sell-off due to economic concerns in the backdrop of downbeat July factory data and tougher coronavirus-led social distancing measures.

The won weakened, while the benchmark bond yield rose.

The benchmark Kospi closed down 27.63 points or 1.17 per cent at 2,326.17. For August, the index was up 3.4 per cent, recording a fifth straight monthly gain.

Heavyweights such as Samsung Electronics and SK Hynix declined 2.5 per cent and 3.5 per cent, respectively.

Foreigners sold a net 1.62 trillion won (S$1.86 billion) worth of shares on the main board, the largest on record.

Slower-than-expected July data, which did not reflect the resurgence in Covid-19 cases, raised worries that economic indicators could worsen going forward, while foreigners' selloff was focused in the electronics sector, Daishin Securities analyst Lee Kyoung-min said.

Industrial output in South Korea, which reported 248 new cases, rose at a much slower pace in July and missed forecasts.

Investors are worried about the impact due to restrictions on dine-ins in Seoul area too.

The won ended at 1,187.8 per US dollar on the onshore settlement platform, down 0.29 per cent. The currency edged up 0.3 per cent on a monthly basis, marking the third consecutive month of gains.

In offshore trading, the won was quoted at 1,187.6 per US dollar, down 0.6 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,187.6.

In money and debt markets, September futures on three-year treasury bonds fell 0.11 point to 111.84.

The most liquid three-year Korean treasury bond yield rose by 4.1 basis points to 0.936 per cent, while the benchmark 10-year yield rose by 2.2 basis points to 1.508 per cent.

REUTERS