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Seoul: Stocks fall most in 6 weeks on Huawei executive arrest
[SEOUL] South Korean shares fell the most in six weeks on Thursday, pounded by quickly souring sentiment after the arrest of a top executive of Chinese telecoms giant Huawei in Canada sent global equity markets tumbling.
The benchmark Kospi index declined 1.55 per cent, or 32.62 points, to 2,068.69, in its sharpest daily fall since Oct 26. The local market has also been under pressure from concerns about Sino-U.S. trade talks and a flattened US yield curve.
Meng Wanzhou, the chief financial officer of Huawei and daughter of the company founder, was arrested in Vancouver and is facing extradition to the United States for alleged violation of US sanctions.
Investors took the news in their stride amid uncertainties about trade talks between Washington and Beijing, Seo Sang-young, an analyst with Kiwoom Securities, said in a note to clients.
The electronic industry sub-index, to which Samsung Electronics and SK Hynix belong, lost 2.6 per cent, with Samsung falling 2.3 per cent and SK diving 3.2 per cent.
Foreigners were net sellers of 389 billion won worth of KOSPI shares.
The junior KOSDAQ market shrank by 3.2 per cent, posting its biggest single-day drop since Oct. 29.
The main index has dropped over 16 per cent so far this year, pressured by a series of global events, including a prolonged Sino-U.S. trade war and a slowing global economy.
Bucking the broad selloff, carmaker Hyundai Motor jumped 2.8 per cent, with investors welcoming the news of its factory plan hitting a snag.
Game giant Netmarble fell 12 per cent after its newly released mobile game showed technical errors.
The won weakened in line with the global selloff in risky assets. The currency was quoted at 1,120.3 per dollar on the onshore settlement platform, 0.55 per cent weaker than its previous close at 1,114.1.
In money and debt markets, December futures on three-year treasury bonds rose 0.14 points to 109.15.
The South Korean three-month Certificate of Deposit benchmark rate was quoted at 1.9 per cent, while the benchmark three-year Korean treasury bond yielded 1.846 per cent, lower than the previous day's 1.90 per cent.