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Seoul: Shares tumble tracking US rout, set to post first weekly drop in a month

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South Korean shares were on track to post their first weekly drop in a month as they slumped on Friday, tracking a rout on Wall Street on renewed fears of a second wave of coronavirus infections.

[SEOUL] South Korean shares were on track to post their first weekly drop in a month as they slumped on Friday, tracking a rout on Wall Street on renewed fears of a second wave of coronavirus infections.

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

As of 01.40 GMT, the Seoul stock market's main Kospi fell 58.50 points or 2.7 per cent, to 2,118.28.

The index was poised to snap three consecutive weekly gains, down 2.9 per cent so far in the week.

"Worries of a second US virus wave are hitting shares after an overnight US slump," said Na Jeong Hwan, an analyst at DS Investment & Securities. "Pharmaceutical, bio and software shares, which are seen to benefit from the outbreak, are defending the overall drop. The fall today is likely to be a temporary dip."

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Samsung Electronics Co fell 3.9 per cent and SK Hynix dropped about 4 per cent, while Samsung Biologics jumped 6.2 per cent.

About half a dozen US states, including Texas and Arizona, are grappling with a rising number of coronavirus patients filling hospital beds, fanning concerns that the reopening of the economy may spark a second wave of infections.

The S&P 500 slumped 5.9 per cent in its steepest one-session loss since March 16 on Thursday. Investors also reacted to dour economic forecasts from the Federal Reserve.

Foreigners were net sellers of 208.1 billion won (S$0.24 billion) worth of South Korean shares on the main board on Friday.

The won was quoted at 1,207.7 per US dollar on the onshore settlement platform, 0.9 per cent lower than its previous close at 1,196.4.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.8 per cent and Japanese stocks fell 1.9 per cent.

In money and debt markets, June futures on three-year treasury bonds rose 0.03 point to 112.12, while the three-month Certificate of Deposit rate was quoted at 0.8 per cent.

The most liquid three-year Korean treasury bond yield fell by 0.1 basis point to 0.836 per cent, while the benchmark 10-year yield fell by 2.3 basis points to 1.358 per cent.

REUTERS

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