Seoul: Stocks end near 7-week low ahead of LG Energy IPO; rates outlook weighs

[SEOUL] South Korean shares ended at a near 7-week low on Monday (Jan 17), as traders cut their positions ahead of the long-awaited LG Energy Solution's US$10.7 billion initial public offering (IPO) and with more rate hike bets sapping risk appetite. The Korean won weakened, while the benchmark bond yield rose.

The benchmark Kospi ended down 31.82 points, or 1.09 per cent, at its lowest close since Dec 1 of 2,890.10.

Tech heavyweights led the declines, with chip giants Samsung Electronics and SK Hynix dropping 0.26 per cent and 1.17 per cent, respectively.

Battery maker LG Energy Solution raised US$10.7 billion in its IPO, attracting record demand for a deal in South Korea, while institutional investors placed bids valuing at a record US$12.8 trillion.

The public subscription for retail investors will take place on Jan 18-19.

Hawkish signals from the Federal Reserve pushed US Treasury yields higher, while the Bank of Korea last week raised its policy rate to 1.25 per cent, bringing it back to pre-pandemic levels.

A slew of Chinese economic data confirming the deadening effect of coronavirus restrictions on consumer spending also weighed on sentiment.

Foreigners were net sellers of 252 billion won (S$284.7 million) worth of shares on the main board.

The won was quoted at 1,192.7 per dollar on the onshore settlement platform, 0.45 per cent lower than its previous close.

In offshore trading, the won was quoted at 1,192.6 per dollar, down 0.2 per cent, while in non-deliverable forward trading its 1-month contract was at 1,193.1.

In money and debt markets, March futures on 3-year treasury bonds fell 0.31 point to 108.04.

The most liquid 3-year Korean treasury bond yield rose by 9.2 basis points to 2.138 per cent, while the benchmark 10-year yield rose by 10.7 basis points to 2.560 per cent.

REUTERS