Seoul: Stocks flat as stronger dollar offsets New Year optimism

[SEOUL] South Korean shares closed little changed on Tuesday (Jan 4) as New Year optimism was offset by a stronger dollar holding back foreign investors and institutional investors continuing to offload shares after the ex-dividend date.

The Korean won ended lower, after having hit a 12-week low earlier in the day, while the benchmark bond yield rose.

The benchmark Kospi ended up 0.47 points, or 0.02 per cent, at 2,989.24, following a 0.37 per cent gain on Monday.

Among heavyweights, technology giant Samsung Electronics rose 0.13 per cent, while platform company Naver fell 2.79 per cent.

The US dollar strengthened as money markets were seen having fully priced in a first US rate increase by May, and 2 more by the end of 2022, CME Group's FedWatch programme showed.

That offset a boost from Wall Street, which was driven overnight by strong gains in Apple and Tesla.

"Institutional investors continued their sell-off since the ex-dividend date (of South Korean equities) last week, while the stronger dollar limited investment from foreign investors," said Daishin Securities' analyst Lee Kyoung-min.

On the main board, foreigners bought net 93.8 billion won (S$106.5 million) worth of shares.

The won was quoted at 1,194.1 per dollar on the onshore settlement platform, 0.19 per cent lower than its previous close. It fell as much as 0.37 per cent in early trade to its lowest level since Oct 13.

In offshore trading, the won was quoted at 1,193.9, while in non-deliverable forward trading its 1-month contract was quoted at 1,194.7.

In money and debt markets, March futures on 3-year treasury bonds fell 0.01 point to 108.84.

The most liquid 3-year Korean treasury bond yield rose by 0.9 basis point to 1.865 per cent.

REUTERS