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Seoul: Stocks fall on trade war concerns, Fed rate hike fears

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[SEOUL] South Korea's Kospi stock index declined nearly 1 per cent on Monday as continued concerns about the Sino-US trade war and fears of faster rate hikes in the United States dented risk appetite. The won fell, while bond yields edged higher.

The United States and China are not close to a deal to resolve their trade differences, the White House's top economic adviser said on Friday, adding that he was less optimistic than earlier that such an agreement would come together.

US job growth rebounded sharply in October and wages recorded their largest annual gain in 9-1/2 years, pointing to further labour market tightening that could encourage the Federal Reserve to raise interest rates again in December.

The stock market was also affected by the rise in US treasury rate, said Noh Dong-kil, an analyst with Shinhan Investment Corp.

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The Kospi closed down 19.08 points, or 0.91 per cent, at 2,076.92.

Hyundai Motor Co, South Korea's largest carmaker, closed down 5.5 per cent due to a slump in its sales in China.

The won was quoted at 1,123.5 per dollar on the onshore settlement platform, 0.17 per cent weaker than its previous close at 1,121.6.

In offshore trading, the won was quoted at 1,123.91 per US dollar, down 0.61 percent from the previous day, while in one-year non-deliverable forwards it was being asked at 1,104.7 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.26 per cent, after US stocks ended the previous session with mild losses. Japanese stocks weakened 1.55 per cent.

The Kospi is down around 15.1 per cent so far this year, and down by 9.59 per cent in the previous 30 days.

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 353,462,000 shares and, of the total traded issues of 899, the number of advancing shares was 297.

Foreigners were net sellers of 54,006 million won worth of shares, snapping three sessions of net purchase.

The US dollar has risen 5.4 per cent against the won this year. The won's high for the year is 1,053.55 per dollar on April 2, 2018 and low is 1,146.26 on Oct 11, 2018.

In money and debt markets, December futures on three-year treasury bonds fell 0.01 points to 108.59.

The Korean three-month Certificate of Deposit benchmark rate was quoted at 1.7 per cent, while the benchmark three-year Korean treasury bond yielded 1.987 per cent, higher than the previous day's 1.98 per cent.

REUTERS