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Seoul: Stocks end nearly 1% down as chipmakers lose steam

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[SEOUL]arkets: South Korean shares closed nearly 1 per cent lower on Wednesday, as leading chipmakers shed recent gains aided by a rise in memory chip prices amid trade tensions between Seoul and Tokyo. The South Korean won strengthened, while the benchmark bond yield fell.

Trade tensions between South Korea and Japan over compensation for wartime forced labourers have shown scant signs of abating, threatening global memory chip supply chain.

Shares of Samsung Electronics and SK Hynix closed down 1.9 per cent and 1.5 per cent, respectively, overshadowing the broader markets.

Following Japan's statement earlier this month that it would tighten restrictions on exports of high-tech materials, SK Hynix shares soared 13.4 per cent this month until Tuesday's close, while Samsung Elec had gained 0.6 per cent during the same period, lifted by a rise in memory chip prices.

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If Japan's export curbs are prolonged and supply glut of memory chips is resolved, South Korean chip giants are expected to suffer a setback in production, said Ha In-hwan, analyst, Meritz Securities.

The Seoul stock market's main Kospi index closed down 19.15 points or 0.91 per cent at 2,082.30 points.

Foreigners were net buyers of 46.6 billion won worth of shares on the main board.

The won was quoted at 1,177.9 per dollar on the onshore settlement platform, 0.08 per cent higher than its previous close at 1,178.9.

In offshore trading, the won was quoted at 1,177.6 per US dollar, up 0.1 per cent from the previous session, while in non-deliverable forward trading its one-month contract was quoted at 1,175.7 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.08 per cent, after US stocks ended at a record high. Japanese stocks rose 0.41 per cent.

The Kospi rose 2.02 per cent so far this year, but lost 0.5 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 841.58 million shares and, of the total traded issues of 893, the number of advancing shares was 200.

The won lost 5.3 per cent against the US dollar so far this year.

In money and debt markets, September futures on three-year treasury bonds rose 0.06 points to 110.79, while the three-month Certificate of Deposit rate was quoted at 1.57 per cent.

The most liquid three-year Korean treasury bond yield fell by 2.0 basis points to 1.320 per cent, while the benchmark 10-year yield dropped 0.8 basis point to 1.462 per cent. 

REUTERS