Seoul: Stocks fall on coronavirus worries, bleak US data

[SEOUL] South Korean shares fell as much as 1.3 per cent on Wednesday on worries of tougher social distancing rules after a rise in domestic coronavirus infections and as bleak US data raised worries of a global economic recovery.

By 0214 GMT, the benchmark Kospi fell 16.61 points or 0.7 per cent to 2350.12, set to snap three straight gains.

South Korea reported 320 new infections as of midnight Tuesday, even as the country ordered most schools in Seoul and surrounding areas to close and move classes back online.

The Bank of Korea will likely hold policy interest rate unchanged on Thursday, but it is expected to downgrade its economic projection by a large margin from the current 0.2 per cent decline.

US consumer confidence dropped to a more than six-year low in August as households worried about the labour market and incomes, casting doubts on the sustainability of the economy's recovery from the Covid-19 recession.

Markets are also watching out for Federal Reserve Chair Jerome Powell's speech on Thursday, when he is expected to address the US central bank's view on inflation and monetary policy.

Foreigners were net sellers of 46 billion won (S$53.1 million) worth of shares on the mainboard.

The won was quoted at 1,186.5 per US dollar on the onshore settlement platform, 0.1 per cent lower than its previous close of 1,185.1.

In offshore trading, the won was quoted at 1,86.5 per US dollar, down 0.1 per cent from the previous day, while in non-deliverable forward trading, its one-month contract was quoted at 1,186.04.

In money and debt markets, September futures on three-year treasury bonds was down 0.04 point at 112.13.

The most liquid three-year Korean treasury bond yield was quoted at 0.825 per cent, while the benchmark 10-year yield was at 1.387 per cent.

REUTERS