Seoul: Stocks drop on lingering trade worries

[SEOUL] South Korean shares slipped on Tuesday as persistent worries over the Sino-US trade spat led investors to trim their equity exposure. The South Korean won and the benchmark bond yield fell.

Anxieties over the Sino-US trade talks have been the main reason behind investors' soured sentiment, prompting sales by foreign investors amid a risk-off mood, said Lee Won, an analyst at Bookook Securities.

China has lodged a complaint against the United States at the World Trade Organization over US import duties, the Chinese Commerce Ministry said on Monday.

The Seoul stock market's main Kospi ended down 3.50 points, or 0.18 per cent, at 1,965.69 points.

Foreigners were net sellers of 303.6 billion won ($250.36 million) worth of shares on the main board.

South Korea's cosmetic makers exposed to China rallied, after Chinese factory activity data beat market estimates. Shares of AmorePacific and LG Household & Healthcare rose 7.6 per cent and 4.8 per cent, respectively, helping the chemical sub-index gain 1.3 per cent.

Shares of Samsung Electronics extended losses and closed 1.3 per cent lower after Fitch Ratings said it expected memory chip manufacturers to continue to suffer in the short-term, before the industry stabilises next year.

The won was quoted at 1,215.6 per dollar on the onshore settlement platform, 0.39 per cent lower than its previous close at 1,210.8.

In offshore trading, the won was quoted at 1,215.6 per U.S. dollar, down 0.2 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,214.5 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.57 per cent. Japanese stocks rose 0.02 per cent.

The Kospi has fallen 3.69 per cent so far this year, and lost 6.0 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 in the Kospi index was 331.14 million shares and, of the total traded issues of 887, the number of advancing shares was 439.

The won has lost 8.2 per cent against the US dollar so far this year.

In money and debt markets, September futures on three-year treasury bonds rose 0.02 point to 110.98, while the three-month Certificate of Deposit rate was quoted at 1.49 per cent.

The most liquid three-year Korean treasury bond yield fell by 0.8 basis point to 1.226 per cent, while the benchmark 10-year yield fell by 2.2 basis points to 1.326 per cent.

REUTERS