Seoul: Stocks end lower on worries over economy, Q2 earnings

[SEOUL] South Korean shares failed to pick up on Monday even after China posted its growth data, as concerns over second-quarter corporate earnings and fragile domestic economy weighed on the index. The won was flat, while the benchmark bond yield gained.

China's economic growth slowed to 6.2 per cent in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting US trade pressure. China shares climbed after Beijing posted an estimate-meeting growth data.

Considering South Korea's sluggish economy, which has added pressure on the central bank to cut interest rates soon, its markets are not attracting foreign investors, said Na Jeong Hwan, analyst, DS Investment & Securities.

Concerns over second-quarter corporate earnings also exist, he added.

Investors remained on guard ahead of second-quarter corporate earnings due this month, with SK Hynix posting its results on July 25, while Samsung Electronics is scheduled to announce earnings on July 31.

The Seoul stock market's main Kospi index closed down 4.18 points or 0.2 per cent at 2,082.48 points, snapping a three-session winning streak.

Foreigners were net buyers of 14.2 billion won (S$16.39 million) worth of shares on the main board.

The won was quoted at 1,179.3 per US dollar on the onshore settlement platform, 0.01 per cent lower than its previous close at 1,179.2.

In offshore trading, the won was quoted at 1,179.2 per US dollar, down 0.2 per cent from the previous session, while in non-deliverable forward trading its one-month contract was quoted at 1,178.0 per US dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.17 per ent, after US stocks notched all-time highs.

The Kospi climbed 2.03 per cent so far this year, and gained 2.3 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 455.08 million shares and, of the total traded issues of 896, the number of advancing shares was 185.

The won lost 5.4 per cent against the U.S dollar so far this year.

In money and debt markets, September futures on three-year treasury bonds fell 0.03 point to 110.49, while the 3-month Certificate of Deposit rate was quoted at 1.78 per cent.

The most liquid 3-year Korean treasury bond yield rose by 0.3 basis points to 1.428 per cent, while the benchmark 10-year yield climbed by 0.2 basis points to 1.573 per cent.

REUTERS