Seoul: Stocks give up early gains as US sanctions against some China firms weigh

[SEOUL] South Korean shares gave up early gains on Tuesday (Feb 8), weighed down by caution ahead of US inflation data due later this week and US sanctions against some Chinese companies.

Both the Korean won and the benchmark bond yield rose.

The benchmark Kospi closed up 1.41 points or 0.05 per cent at 2,746.47, after having gained 1.27 per cent in early trade.

Traders awaited US inflation data, due out on Thursday, that is considered crucial for the Federal Reserve's tapering timeline, with markets now pricing in a 1-in-3 chance that the central bank might hike rates by a full 50 basis points in March.

The US Commerce Department said on Monday it had added 33 Chinese entities to its so-called "unverified list", which requires US exporters to go through more procedures before shipping goods to the entities, pulling down China's blue-chip CSI300 index to a 19-month low.

Among heavyweights, chip giant Samsung Electronics rose 0.68 per cent and peer SK Hynix climbed 1.63 per cent, while battery maker LG Energy Solution (LGES) fell 1.09 per cent.

LGES, which made its Kospi debut in late January, gained as much as 5.29 per cent in early trade after the company said it aimed to boost sales by about 8 per cent in 2022.

Samsung Biologics jumped to a 3-week high in intraday trade on hopes that it could benefit from the US Commerce Department's move to add China's WuXi Biologics to its export control list. Shares of WuXi Biologics tumbled 22.77 per cent.

Foreigners were net sellers of 97.2 billion won (S$109 million) worth of shares on the main board.

The won ended at 1,197.7 per dollar on the onshore settlement platform, 0.25 per cent higher than its previous close.

In offshore trading, the won was quoted at 1,197.8, while in non-deliverable forward trading its 1-month contract was quoted at 1,198.3.

In money and debt markets, March futures on 3-year treasury bonds fell 0.24 point to 107.57.

The benchmark 10-year yield rose by 9.6 basis points to 2.733 per cent. REUTERS