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Seoul: Shares fall as Sino-US tensions outweigh stimulus hopes

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South Korean shares fell on Friday as US President Donald Trump's remarks aggravated trade tensions with China, cancelling out optimism around plans for more US stimulus to revive the coronavirus-hit economy.

[SEOUL] South Korean shares fell on Friday as US President Donald Trump's remarks aggravated trade tensions with China, cancelling out optimism around plans for more US stimulus to revive the coronavirus-hit economy.

The Seoul stock market's main Kospi fell 4.41 points, or 0.2 per cent, to 1,920.55 as of 0204 GMT.

The Korean won weakened, while the benchmark bond yield rose.

The South Korean market seems more vulnerable to growing Sino-US tensions than others, said Seo Sang Young, an analyst at Kiwoom Securities.

China is the biggest buyer of the export-reliant economy's products.

US President Donald Trump on Thursday said he has no interest in speaking to China's President Xi Jinping right now and suggested he could even cut ties with the world's second largest economy.

Meanwhile, a White House spokeswoman on Thursday said Mr Trump is open to negotiations on another possible stimulus bill to prop up an economy sagging under restrictions imposed to arrest the Covid-19 outbreak.

South Korea's finance ministry pledged to introduce more measures to minimise the employment shock from the pandemic, saying risks to the economy were intensifying as domestic and global demand slump.

South Korea reported 27 new infections on Friday amid the country's efforts to contain an outbreak centred around bars and nightclubs in Seoul after weeks of nearly no new domestic cases.

South Korea's US crude oil imports in April increased 32.1 per cent from a year earlier, although overall crude imports fell as some refiners lowered run rates to cope with a slump in demand, customs data showed on Friday.

Foreigners were net sellers of 199.8 billion won (S$0.23 billion) worth of shares on the main board.

The won was quoted at 1,228.5 per US dollar on the onshore settlement platform, 0.04 per cent lower than its previous close at 1,228.0.

In offshore trading, the won was quoted at 1,228.8 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 1,228.3.

In money and debt markets, June futures on three-year treasury bonds fell 0.01 point to 112.07.

The most liquid three-year Korean treasury bond yield rose by 0.1 basis point to 0.872 per cent, while the benchmark 10-year yield rose by 0.5 basis point to 1.387 per cent.

REUTERS

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