Seoul: Stocks fall as US rate hike bets, local Covid cases rise

[SEOUL] South Korean shares fell on Monday (Feb 7) amid growing bets on US Federal Reserve raising interest rates, while rising local Covid-19 cases also dampened the sentiment. The Korean won weakened, while the benchmark bond yield rose.

The benchmark Kospi fell 5.2 points, or 0.19 per cent, to end at 2,745.06.

Among the heavyweights, technology giants Samsung Electronics and SK Hynix fell 1.35 per cent and 1.2 per cent, respectively, while LG Chem and Naver dropped 5.75 per cent and 0.15 per cent.

There is now a higher likelihood of a 50 basis point rate hike by the Fed, following surprisingly good US job market data, which pressured stocks, said Seo Sang-young, an analyst at Mirae Asset Securities.

The US economy created far more jobs than expected in January despite the disruption to consumer-facing businesses from a surge in Covid-19 cases, data showed on Friday.

Foreigners were net sellers of 5.2 billion won (S$5.8 million) worth of shares on the main board.

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The won was quoted at 1,200.7 per dollar on the onshore settlement platform, 0.31 per cent lower than its previous close at 1,197.

In offshore trading, the won was quoted at 1,199.9 per dollar, down 0.1 per cent from the previous session, while in non-deliverable forward trading its 1-month contract was quoted at 1,200.6.

The Kospi has fallen 7.81 per cent so far this year, but lost 7.2 per cent in the last 30 trading sessions.

The won has lost 1 per cent against the dollar so far this year.

In money and debt markets, March futures on 3-year treasury bonds fell 0.2 point to 107.82.

The most liquid 3-year Korean treasury bond yield rose by 4.1 basis points to 2.236 per cent, while the benchmark 10-year yield rose by 1.6 basis points to 2.635 per cent. REUTERS