Seoul: Shares close at near two-month low as economic recovery falters

[SEOUL] South Korean shares closed at a near two-month low on Thursday, after data from the United States and Europe pointed to a faltering economic recovery amid a resurgence in Covid-19 cases. The Korean won and the benchmark bond yield weakened.

The benchmark Kospi closed down 60.54 points or 2.59 per cent at 2,272.70, its lowest since Aug 3.

Market heavyweight Samsung Electronics led the losses, closing 1.4 per cent weaker. Hyundai Motor and biopharmaceutical firm Celltrion dropped 4.5 per cent and 6 per cent, respectively.

US business activity cooled in September as gains at factories were offset by a retreat in services, while a survey showed that business growth in euro zone ground to a halt this month.

Denting sentiment further were local reports that South Korea saw 125 new Covid-19 cases, as of Wednesday midnight, more than 110 a day earlier and bringing the national tally to 23,341.

"Considering the sharp fall, there is little room for further decline, but volatility will likely remain high until the national holiday (at the end of the month)," Cape Investment & Securities' analyst Han Ji-young said.

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Foreigners were net sellers of 195.9 billion won (S$229.7 million) worth of shares on the main board.

The won ended trading at 1,172.7 per US dollar on the onshore settlement platform, 0.71 per cent lower than its previous close at 1,164.4, logging the sharpest decline since July 10.

In offshore trading, the won was quoted at 1,172.8 per dollar, while in non-deliverable forward trading its one-month contract was quoted at 1,172.9.

In money and debt markets, December futures on three-year treasury bonds rose 0.07 point to 112.00.

The most liquid three-year Korean treasury bond yield fell by 1.9 basis points to 0.864 per cent.

REUTERS