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Seoul: Stocks drop on foreign selling; won falls for 4th straight week

[SEOUL] South Korea's Kospi stock index erased early gains to end lower on Friday, as foreigners continued to offload shares amid escalating US-China trade war. The South Korean won extended its decline to a fresh 28-month low, while the benchmark bond yield was unchanged.

The Seoul stock market's main Kospi closed down 11.89 points, or 0.58 per cent, at 2,055.80. For the week, the major index lost 2.48 per cent, marking second straight week of decline. Foreigners were net sellers of 198.6 billion won worth of shares on the main board. They were net sellers for seventh consecutive session, the longest since late November last year.

The trade war with the United States will only make China stronger and will never bring the country to its knees, the ruling Communist Party's People's Daily wrote in a front-page commentary that evoked the patriotic spirit of past wars.

South Korea's biggest chat operator Kakao Corp closed down 6.7 per cent after Affinity Equity Partners sells all of its holdings at a discount.

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The won was quoted at 1,195.7 per dollar on the onshore settlement platform, at its lowest level since January 2014 and 0.35 per cent lower than its previous close at 1,191.5.

Pressured by escalating trade spat between the United States and China, the currency weakened for the fourth straight week, its longest weekly falling string since July 2018.

In offshore trading, the won was quoted at 1,194.2 per US dollar, down 0.2 per cent from the previous day, while in one-year non-deliverable forward trading its one-month contract was quoted at 1,192.8 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.73 per cent, after US stocks rose. Japanese stocks rose 0.89 per cent.

The Kospi has risen 0.72 per cent so far this year, and fell 5.0 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 519.45 million shares and, of the total traded issues of 893, the number of advancing shares was 316.

The won has lost 6.7 per cent against the US dollar this year.

In money and debt markets, June futures on three-year treasury bonds fell 0.01 points to 109.68, while the three-month Certificate of Deposit rate was quoted at 1.84 per cent.

The most liquid three-year Korean treasury bond yield fell by 0.5 basis points to 1.670 per cent, while the benchmark 10-year yield was flat at 1.820 per cent.