Seoul: Shares fall, won edges up in catch-up trade after long weekend

[SEOUL] Seoul shares fell on Wednesday morning but were off opening lows as investors played catch-up after a long weekend, with concerns over a slowdown in China's economy continuing to stoke volatility in global markets.

The Korea Composite Stock Price Index (KOSPI) was down 0.4 per cent at 1,934.50 points as of 0224 GMT after falling as much as 1.4 per cent to a near three-week low of 1,915.46. Losers outnumbered gainers by 27 to 10.

Domestic financial markets were closed on Monday and Tuesday for a public holiday.

Chinese industrial companies' profits slid at their fastest rate in four years in August, official data showed on Monday. "Global financial markets, including stock markets, have been more sensitive to Chinese economic indicators," said Cho Byung-hyun, an analyst at Yuanta Securities.

Global markets have been thrown into turmoil in recent months as cooling growth in China's giant economy puts more stress on external demand, hurting nations from Brazil to Australia to South Korea.

The US Federal Reserve earlier this month held off on raising rates for the first time since 2006 in part due to worries about China's economic woes.

Pharmaceutical shares underperformed the broad market, down 3.6 per cent. All 39 issues in the sector fell.

Kang Hyun-gie, a stock analyst at Dongbu Securities, said pharmaceutical shares tracked falls in Us biotech stocks on heightened uncertainty over policy related to drugs after remarks from Us Democratic presidential candidate Hillary Clinton.

Foreigners were set to be net sellers for a sixth consecutive session, offloading a net 104.1 billion won (S$124.7 million) of the KOSPI shares by midday.

On the currency market, the South Korea won edged up against the dollar and was poised to end a five-day losing streak, helped by domestic exporters' demand for month-end settlement.

The won was up 0.2 per cent at 1,192.9 per dollar.

Yuna Park, a foreign-exchange analyst at Dongbu Securities said the won's losses could be contained by exporters' demand for settlements and on risks of intervention by foreign exchange authorities around the 1,200 level.

December futures on three-year treasury bonds were up 0.10 points at 109.85.

REUTERS