Seoul: Stocks end lower on institutional sell off ahead of holidays

[SEOUL] South Korea's Kospi stock index erased early gains and ended marginally lower on Thursday due to institutional sell off ahead of Chinese New Year holidays, amid data showed further contraction in China's factory activity. The South Korean won gained, while bond yields fell.

Chinese factory activity contracted for a second straight month in January, data showed on Thursday, pointing to further strains on the economy that could heighten risks to global growth.

The market earlier hovered near its highest level since mid-October on dovish Fed. US Federal Reserve said it will be patient on future rate hikes, as it held interest rates steady on Wednesday.

At 0632 GMT, the KOSPI closed down 1.35 points, or 0.06 per cent, at 2,204.85.

"Institutional selloff cut earlier gains ahead of the country's three-day holiday next week, while it (institutions) took a cautious stance on the sharp surge in recent Kospi shares amid the ongoing US-China trade talks," said Lee Won, an analyst at Bookook Securities.

Korea Development Bank, the biggest shareholder of Daewoo Shipbuilding and Marine Engineering Co Ltd, on Thursday said it has signed a conditional deal with Hyundai Heavy Industries Group to sell Daewoo shares.

Netmarble Corp, South Korean mobile gaming company, said on Thursday it will form a consortium to bid for the holding company that controls Nexon Co.

Samsung Electronics Co Ltd warned of weaker earnings in 2019 as it posted a 29 per cent drop in fourth-quarter operating profit on Thursday, hit by a slowdown in demand for memory chips.

The won was quoted at 1,112.7 per dollar on the onshore settlement platform, 0.32 per cent firmer than its previous close at 1,116.3.

In offshore trading, the won was quoted at 1,112.58 per US dollar, down 0.23 per cent from the previous day, while in one-year non-deliverable forwards it was being asked at 1,096.45 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.74 per cent, after US stocks ended the previous session with gains. Japanese stocks rose 1.06 per cent.

The Kospi is up around 8.1 per cent so far this year, and up by 6.61 per cent in the previous 30 days.

The current price-to-earnings ratio is 12.10, the dividend yield is 1.28 per cent and the market capitalisation is 1,242.04 trillion won.

The trading volume during the session on the Kospi index was 537,459,000 shares and, of the total traded issues of 898, the number of advancing shares was 494.

Foreigners were net buyers of 283,271 million won worth of shares.

The US dollar has fallen 0.08 per cent against the won this year. The won's high for the year is 1,108.67 per dollar on Jan 31, 2019 and low is 1,133.4 on January 21 2019.

In money and debt markets, March futures on three-year treasury bonds rose 0.1 points to 109.26.

The Korean three-month Certificate of Deposit benchmark rate was quoted at 1.86 per cent, while the benchmark three-year Korean treasury bond yielded 1.812 per cent, lower than the previous day's 1.83 per cent.

REUTERS