Seoul: Stocks end lower on Evergrande, China power shortage worries

[SEOUL] South Korean shares closed lower on Tuesday, in line with broader Asian markets on lingering fears over the fate of China Evergrande Group and worries about the potential impact of a widening power shortage in China.

The won weakened to a one-year low, while the benchmark bond yield rose.

The Kospi closed down 35.72 points or 1.14 per cent at 3,097.92.

Chip giants led the decline on the benchmark index, with Samsung Electronics and SK Hynix falling 1.80 per cent and 0.96 per cent, respectively. Naver and Kakao dropped 2.61 per cent and 2.08 per cent, respectively.

Without making a reference to ailing developer Evergrande, China's central bank vowed to protect consumers exposed to the housing market on Monday and injected more cash into the banking system.

Widening power shortages in China, meanwhile, halted production at a number of factories including suppliers to Apple and Tesla and are expected to hit the country's manufacturing sector and associated supply chains.

Further denting risk appetite were soaring US Treasury yields that touched a three-month high overnight following the Federal Reserve's signals last week that bond purchases could be tapered as early as November.

Foreigners were net buyers of 10.7 billion won (S$12.2 million) worth of shares on the main board.

The won ended at 1,184.4 per dollar on the onshore settlement platform, 0.64 per cent lower than its previous close and marking the lowest close since mid-September last year.

In offshore trading, the won was quoted at 1,184.2 per dollar, down 0.5 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,185.1.

In money and debt markets, December futures on three-year treasury bonds fell 0.16 point to 109.35.

The benchmark 10-year yield soared by 8.2 basis points to 2.249 per cent.

REUTERS