Seoul: Shares drop on liquidity fears in China, US stimulus worries

[SEOUL] South Korean stocks fell on Tuesday as foreign investors turned net sellers due to liquidity fears after China's central bank withdrew cash from its banking system and as uncertainty over a US stimulus package lingered.

By 0630 GMT, the benchmark Kospi fell 68.68 points, or 2.14 per cent, to 3,140.31.

Short-term borrowing costs in China jumped to their pre-Covid-19 levels on Tuesday, pressured by the combination of the central bank's extended net drain of cash from the financial system and higher holiday demand.

Worries over the US$1.9 trillion US stimulus plan rose after it faced opposition from Republicans in Congress.

That overshadowed data showing South Korea grew at a faster-than-expected pace in the fourth quarter.

Foreigners were net sellers of 1,976.0 billion won (S$2.3 billion) worth of shares on the main board. Retail investors net purchased more than 4 trillion worth of shares.

Heavyweight chip giants Samsung Electronics and SK Hynix dropped 3.02 per cent and 4.44 per cent, respectively.

REUTERS