Seoul: Stocks end 3-day rally on China GDP, surging oil prices

[SEOUL] South Korean shares closed lower on Monday (Oct 18), ending a 3-day rally, as China's economic growth in the third quarter hit a 1-year low, while rising oil prices stoked inflation fears. The won weakened, while the benchmark bond yield rose.

The Kospi ended 8.38 points or 0.28 per cent lower at 3,006.68, logging the first fall in 4 sessions.

China's economy hit its slowest pace of growth in a year in the third quarter, hurt by power shortages, supply bottlenecks, sporadic Covid-19 outbreaks and major wobbles in the property sector.

Meanwhile, oil prices hit their highest in years as demand continues its recovery from the Covid-19 pandemic.

Chip giant Samsung Electronics and platform company Naver rose 0.14 per cent and 0.76 per cent, respectively, while chipmaker SK Hynix and petrochemical firm LG Chem fell 1.32 per cent and 1.08 per cent each.

LG Chem's battery subsidiary LG Energy Solution (LGES) entered an agreement with automaker Stellantis to form a joint venture to produce battery cells and modules for North America.

Foreigners were net buyers of 38.2 billion won (S$43.5 million) worth of shares on the main board.

"For the Kospi to make a meaningful rebound, surging oil and energy prices need to be stabilised," said Huh Jae-hwan, analyst at Eugene Investment & Securities.

The won ended at 1,187.6 per dollar on the onshore settlement platform, down 0.44 per cent.

In offshore trading, the won was quoted at 1,187.8 per dollar, down 0.5 per cent, while in non-deliverable forward trading, its 1-month contract was quoted at 1,188.2.

In money and debt markets, December futures on 3-year treasury bonds fell 0.30 point to 108.52.

The benchmark 10-year yield rose by 5.1 basis points to 2.406 per cent.

REUTERS