Seoul: Stocks drop as investors lose confidence after weak US data

[SEOUL] South Korea's KOSPI stock index slipped on Tuesday as investors were fretting about an unexpected fall in US construction spending in December. The Korean won weakened, while the benchmark bond yield rose.

As of 0139 GMT, the Seoul stock market's main index fell 9.26 points or 0.42 per cent to 2,181.40.

US construction spending unexpectedly fell in December as investment in both private and public projects dropped, leading economists to expect that the government will trim its economic growth estimate for the fourth quarter.

The revision of Chinese growth outlook is not affecting much, since that's around market estimate, said Jeong Dai, an analyst from Meritz Securities.

China has set its 2019 economic growth target at 6.0 to 6.5 per cent, Premier Li Keqiang said on Tuesday, compared with last year's goal of around 6.5 per cent.

South Korea's February headline inflation rate grew a mere 0.5 per cent in annual terms, marking the lowest growth since August 2016.

Shares of companies making masks and air purifiers rallied as fine dust blankets South Korea, while the government enforced emergency measures.

Foreigners were net sellers of 48.5 billion won worth of shares on the main board.

The won was quoted at 1,125.6 per dollar on the onshore settlement platform , 0.06 per cent lower than its previous close at 1,124.9.

In offshore trading, the won was quoted at 1,126.3 per US dollar, down 0.1 per cent from the previous day, while in one-year non-deliverable forward trading its one-month contract was quoted at 1,124.4 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.25 per cent, after US stocks dropped. Japanese stocks fell 0.42 per cent.

The KOSPI has risen 6.89 per cent so far this year, and gained rose 4.5 per cent in the previous 30 trading sessions.

The current price-to-earnings ratio is 12.10, the dividend yield is 1.28 per cent and the market capitalisation is 1,242.04 trillion won.

The trading volume during the session on the KOSPI index was 83.84 million shares and, of the total traded issues of 894, the number of advancing shares was 317.

The won has lost 1.0 per cent against the US dollar this year.

In money and debt markets, March futures on three-year treasury bonds were unchanged at 109.15, while the three-month certificate of deposit rate was quoted at 1.89 per cent.

The most liquid three-year Korean treasury bond yield rose by 0.2 basis points to 1.836 per cent, while the benchmark 10-year yield rose by 0.3 basis points to 2.03 per cent.

REUTERS