You are here

Seoul: Stocks fall as Trump-Kim summit fails to yield agreement


[SEOUL] South Korea's Kospi stock index extended its loss on Thursday on growing geopolitical risk after the summit between the United States and North Korea signalled dissonance, failing to produce an agreement in the end. The Korean won weakened, while the benchmark bond yield rose.

The Seoul stock market's main index closed down 39.35 points or 1.76 per cent to 2,195.44 points. The benchmark index posted its biggest daily per centage loss since late October, 2018. No agreement was reached in the summit between the US President Donald Trump and North Korean leader Kim Jong Un, according to White House.

The possible dissonance between the United States and North Korea could provide reason for profit taking, said Lee Kyoung-min, an analyst at Daishin Securities. It seems psychological anxiety has grown, Mr Lee added.

Foreigners were net sellers of 257.5 billion won worth of shares on the mainboard.

South Korea's central bank kept monetary policy steady on Thursday in the face of rising economic risks and muted inflation. Markets barely reacted to the widely-expected rate decision.

Shares of South Korean chip giants Samsung Electronics and SK Hynix stumbled on plunging prices of memory chips.

The won was quoted at 1,124.7 per dollar on the onshore settlement platform, 0.50 per cent lower than its previous close at 1,119.1.

In offshore trading, the won was quoted at 1,124.5 per US dollar, down 0.6 per cent from the previous day, while in one-year non-deliverable forward trading its one-month contract was quoted at 1,123.4 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.48 per cent, after US stocks closed down. Japanese stocks fell 0.79 per cent.

The Kospi has risen 7.82 per cent so far this year, and gained 7.7 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 459.26 million shares and, of the total traded issues of 896, the number of advancing shares was 116.

The won has lost 0.8 per cent against the US dollar this year.

In money and debt markets, March futures on three-year treasury bonds fell 0.02 points to 109.23, while the three-month Certificate of Deposit rate was quoted at 1.89 per cent.

The most liquid three-year Korean treasury bond yield rose 0.5 basis point to 1.813 per cent, while the benchmark 10-year yield increased 1.1 basis points to 1.996 per cent.

South Korean financial markets are closed on Friday for a public holiday. Markets will resume trade at normal hours on Monday, March 4.