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Seoul: Stocks inch lower ahead of Fed meeting

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[SEOUL] South Korea's Kospi index edged down on Monday as investors remained cautious ahead of the US Federal Reserve's policy meeting this week and planned talks between China and the United States on the sidelines of the G-20 summit later this month. The South Korean won fell, while the benchmark bond yield rose.

The Seoul stock market's main Kospi closed down 4.68 points, or 0.22 per cent, at 2,090.73.

The wait-and-watch mode dominated investors ahead of the Federal Reserve meeting, said Kim Yong-goo, an analyst at Hana Financial Investment. The wrangling between the United States and China before their meeting at G-20 summit also heightened the cautious mood, Kim added.

The Federal Open Market Committee's (FOMC) two-day policy meeting is set to begin on Tuesday. Strong US retail sales data on Friday rolled back expectations of a Fed rate cut at this week's meeting but bets of an easing at the July meeting remain high.

US President Donald Trump said on Friday "it doesn't matter" if Chinese leader Xi Jinping attends the G-20 summit later this month in Osaka, Japan, predicting a trade deal with Beijing would occur at some point anyway.

Mr Trump would raise the issue of Hong Kong human rights with China's President Xi Jinping at a potential meeting of the two leaders at the G20 summit in Japan this month, US Secretary of State Mike Pompeo said on Sunday.

Foreigners were net sellers of 138.0 billion won worth of shares on the main board.

The won was quoted at 1,186.5 per dollar on the onshore settlement platform, 0.10 per cent lower than its previous close at 1,185.3.

In offshore trading, the won was quoted at 1,186.6 per US dollar, unchanged from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,184.6 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.16 per cent, after US stocks fell. Japanese stocks rose 0.03 per cent.

The Kospi has risen 2.43 per cent so far this year, but lost 4.9 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 547.93 million shares and, of the total traded issues of 891, the number of advancing shares was 342.

The won has lost 6.0 per cent against the US dollar so far this year.

In money and debt markets, June futures on three-year treasury bonds fell 0.05 point to 110.20, while the three-month Certificate of Deposit rate was quoted at 1.80 per cent.

The most liquid three-year Korean treasury bond yield rose by 2.2 basis points to 1.494 per cent, while the benchmark 10-year yield rose by 2.9 basis points to 1.621 per cent.