Seoul: Stocks edge up; won slips after latest US tariff threat

[SEOUL] South Korea's KOSPI stock index edged higher on Thursday, marking their fourth session of gain in five, while the won fell over fears of an escalation in the US-China trade spat. South Korean bond yields rose.

South Korea's central bank held its base rate steady at 1.50 per cent on Thursday for a fifth straight monetary meeting. Bank of Korea said the country's employment conditions were still sluggish while the economy was influenced by the heightened external uncertainties related to the U.S.-China trade dispute. South Korea's trade ministry said on Thursday that the current trade spat between the United States and China could weaken South Korea's exports of "intermediate goods" used in home appliances, computers and communication devices.

At 0631 GMT, the KOSPI was up 4.44 points, or 0.19 per cent, at 2,285.06, recovering from the previous session's fall.

Shares of Samsung BioLogics Co Ltd closed 3.4 per cent higher ahead of an announcement by South Korea's financial watchdog Securities & Futures Commission over a months-long suspicion that the company has violated accounting rules to inflate net profit before its 2016 listing. The country's top financial regulator said after market hours on Thursday that the drug manufacturer violated accounting rules and it will report the case to prosecutors for potential investigation.

The won was quoted at 1,125.9 per dollar on the onshore settlement platform, 0.52 per cent weaker than its previous close at 1,120. The currency slumped to 1,130.2 per dollar intraday and posted its lowest close since October 2017.

In offshore trading, the won was quoted at 1,124.86 per U.S. dollar, up 0.21 per cent from the previous day, while in one-year non-deliverable forwards it was being asked at 1,109.85 per dollar. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.57 per cent, after U.S. stocks ended the previous session with losses. Japanese stocks rose 1.17 per cent.

The KOSPI is down around 7.6 per cent so far this year, and down by 8.00 percent in the previous 30 days. 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 352,528,000 shares and, of the total traded issues of 886, the number of advancing shares was 491.

Foreigners were net sellers of 100,686 million won worth of shares. The US dollar has risen 5.51 per cent against the won this year. The won's high for the year is 1,053.55 per dollar on April 2, 2018 and low is 1,130.1 on July 12, 2018.

In money and debt markets, September futures on three-year treasury bonds fell 0.14 points to 108.17. The Korean three-month Certificate of Deposit benchmark rate was quoted at 1.65 per cent, while the benchmark three-year Korean treasury bond yielded 2.09 per cent, higher than the previous day's 2.06 per cent.

REUTERS