Seoul: Stocks post biggest drop in 2-1/2 weeks on Ukraine tensions

[SEOUL] South Korean shares posted their biggest decline in 2-1/2 weeks on Monday (Feb 14), as investors fretted over escalating tensions surrounding Ukraine and amid caution over monetary tightening and inflationary risks in the United States.

The Korean won strengthened, while the benchmark bond yield fell.

The Kospi closed down 43.23 points or 1.57 per cent at 2,704.48, marking the sharpest decline since Jan 27.

Leading the losses, chip giant Samsung Electronics and battery maker LG Energy Solution dropped 1.60 per cent and 3.94 per cent, respectively, while platform company Naver slid 1.68 per cent.

Worries that Russia could invade Ukraine at any time and might create a surprise pretext for an attack rippled through global markets, pulling down Asian shares and sending oil prices to 7-year peaks.

Amid such geopolitical caution, investors also focused on an appearance by St Louis Fed President James Bullard expected later in the day, given he recently called for 100 basis points of tightening by June.

Foreigners were net buyers of 68.7 billion won (S$77.3 million) worth of shares on the main board.

The won ended at 1,191.1 per dollar on the onshore settlement platform, 0.62 per cent higher than its previous close.

In offshore trading, the won was quoted at 1,197.6 per dollar, up 0.2 per cent from the previous day, while in non-deliverable forward trading its 1-month contract was quoted at 1,195.2.

In money and debt markets, March futures on 3-year treasury bonds rose 0.09 point to 107.56, while the 3-month Certificate of Deposit rate was quoted at 1.50 per cent in late afternoon trade.

The most liquid 3-year Korean treasury bond yield fell by 0.7 basis point to 2.338 per cent, while the benchmark 10-year yield slipped 5 basis points to 2.699 per cent. REUTERS