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S Korea: Stocks drop as worries over earnings prompt profit-booking

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South Korean shares slipped on Tuesday, even as Wall Street hit record highs, as concerns over domestic corporate earnings prompted investors to take profits. The Korean won was steady, while the benchmark bond yield rose.

[SEOUL] South Korean shares slipped on Tuesday, even as Wall Street hit record highs, as concerns over domestic corporate earnings prompted investors to take profits. The Korean won was steady, while the benchmark bond yield rose.

Wall Street's main indices posted record closing highs on Monday after President Donald Trump said an initial US-China trade pact would be signed soon, while Boeing gave the Dow a big boost after the planemaker ousted its chief executive officer.

China will lower tariffs on products ranging from frozen pork and avocado to some types of semiconductors next year as Beijing looks to boost imports amid a slowing economy and a trade war with the United States.

As of 0205 GMT, the Seoul stock market's main KOSPI fell 9.39 points, or 0.43 per cent, to 2,194.32.

For the KOSPI's further rise, earnings of South Korean companies should improve, said Noh Dong-kil, an analyst at NH Investment & Securities. Particularly, prices of memory chips should rise, he added.

Shares of Hanjin Kal, parent company of Korean Air Lines, extended gains after the company's heiress issued a statement opposing her brother.

Foreigners were net sellers of 43 billion won (S$50.1 million) worth of shares on the main board.

The trading volume during the session in the KOSPI index was 296.51 million shares and, of the total traded issues of 906, the number of advancing shares was 326.

The KOSPI has risen 7.51 per cent so far this year, and gained 3.7 per cent in the previous 30 trading sessions.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.18 per cent, after US stocks posted record closing highs. Japanese stocks fell 0.08 per cent.

The South Korean won was quoted at 1,164.2 per US dollar on the onshore settlement platform, 0.01 per cent higher than its previous close at 1,164.3.

In offshore trading, the won was quoted at 1,164.2 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 1,162.5 per US dollar.

The won has lost 4.2 per cent against the US dollar so far this year.

In money and debt markets, March futures on three-year treasury bonds rose 0.01 points to 110.49.

The most liquid 3-year Korean treasury bond yield rose by 0.1 basis points to 1.381 per cent, while the benchmark 10-year yield rose by 0.1 basis points to 1.643 per cent.

REUTERS