Seoul: Stocks sink as Trump hits China's Huawei with severe sanctions

[SEOUL] South Korea's KOSPI stock index sagged on Thursday as US President Donald Trump escalated trade frictions with China, by imposing sanctions on Chinese telecommunications giant Huawei. Meanwhile, the Korean won and the benchmark bond yield fell.

As of 0140 GMT, the Seoul stock market's main KOSPI benchmark fell 18.33 points, or 0.88 per cent, to 2,075.45.

The Trump administration hit Huawei with severe sanctions, adding another incendiary element to the US-China trade dispute just as US Treasury Secretary Steven Mnuchin said he would visit China soon for more talks.

A series of media reports cloud the prospect of trade deal between the United States and China, said Noh Dong-kil, an analyst from Shinhan Investment.

After media reports that Mr Trump is expected to delay the decision on imposing tariffs on imported cars, South Korean auto shares opened sharply higher.

The country's largest automaker Hyundai Motor is trading up 0.8 per cent while Kia Motors added more than 1.2 per cent, making the auto sub-index the sole gainer among KOSPI subcategories.

Foreigners were net sellers of 121.0 billion won (S$184 million) worth of shares on the main board.

The KOSPI has risen 1.81 per cent so far this year, and fell 3.5 per cent in the previous 30 trading sessions.

The current price-to-earnings ratio is 12.10, the dividend yield is 1.28 per cent and the market capitalisation is 1,242.04 trillion won.

The trading volume during the session on the KOSPI index was 261.55 million shares and, of the total traded issues of 894, the number of advancing shares was 295.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.37 per cent, after US stocks ended higher. Japanese stocks fell 0.92 per cent.

The won was quoted at 1,189.3 per US dollar on the onshore settlement platform, 0.06 per cent lower than its previous close at 1,188.6.

In offshore trading, the won was quoted at 1,189.1 per US dollar, down 0.3 per cent from the previous day, while in one-year non-deliverable forward trading its one-month contract was quoted at 1,187.1 per dollar.

The won has lost 6.2 per cent against the US dollar this year.

In money and debt markets, June futures on three-year treasury bonds rose 0.07 points to 109.63, while the 3-month Certificate of Deposit rate was quoted at 1.84 per cent.

The most liquid 3-year Korean treasury bond yield fell by 1.4 basis points to 1.696 per cent, while the benchmark 10-year yield fell by 3.0 basis points to 1.835 per cent.

REUTERS