Seoul: Stocks fall more than 3% on escalating trade tensions

[SEOUL] South Korea's Kospi stock index fell for the fourth consecutive session and posted the biggest daily loss in seven months on Thursday, as China-US trade tensions escalate and investors move to safe-haven assets. The South Korean won weakened, and the benchmark bond yield fell.

The Seoul stock market's main Kospi fell 66.00 points or 3.04 per cent to 2,102.01 points.

Foreigners were net sellers of 186.2 billion won worth of shares on the main board.

South Korean stocks extended losses as US President Donald Trump reiterated his threat to impose additional tariffs on Chinese goods; Investors are keen to know whether the United States will actually impose tariffs beginning this week, says Kim Ye-eun, an analyst from IBK Securities.

Mr Trump says China "broke the deal", will be paying if a deal not reached.

The won was quoted at 1,179.8 per dollar on the onshore settlement platform, 0.88 per cent lower than its previous close at 1,169.4.

In offshore trading, the won was quoted at 1,179.8 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 1,179.3 per dollar. MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.63 per cent, after U.S. stocks held off from making big moves. Japanese stocks fell 0.93 per cent.

The Kospi has risen 2.99 per cent so far this year, and rose 1.1 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 729.22 million shares and, of the total traded issues of 892, the number of advancing shares was 83. The won has lost 5.4 per cent against the US dollar this year. In money and debt markets, June futures on three-year treasury bonds rose 0.05 point to 109.55, while the 3-month Certificate of Deposit rate was quoted at 1.84 per cent.

The most liquid three-year Korean treasury bond yield fell by 0.6 basis point to 1.709 per cent, while the benchmark 10-year yield fell by 1.4 basis points to 1.862 per cent. 

REUTERS