Seoul: Stocks plunge after private survey hints at softening economy

[SEOUL] South Korea's Kospi stock index plunged 1.5 per cent on Wednesday, the first trading session of the new year, after private surveys hinted at softening economies in South Korea and China. The won and bond yields also declined.

South Korean factory activity shrank for a second consecutive month in December as global demand further cooled, a private survey showed, adding to signs of softening in the export-dependent economy.

China's factory activity contracted for the first time in 19 months in December as domestic and export orders continued to weaken, a private survey showed, pointing to a rocky start for the world's second-largest economy in 2019.

The Kospi closed down 31.04 points at 2,010.00.

South Korean companies with a branch in the Kaesong Industrial Complex in North Korea jumped after North Korean leader Kim Jong Un said on Tuesday he was willing to restart the complex without any conditions. Jaeyoung Solutec Co Ltd, In The F Co Ltd and J.Estina Co Ltd rose 4.9 per cent, 8.4 per cent and 5.8 per cent, respectively.

South Korean games makers rose after local company WeMade Entertainment Co Ltd won a copyright infringement lawsuit against a Chinese firm, while China's approval for the release of games boosted investor sentiment. Shares of WeMade jumped 17.9 per cent, while Actoz Soft Co Ltd and Joymax Co Ltd gained 6.8 and 4.8 per cent, respectively.

South Korean refineries tumbled as declining oil prices darken their profit outlook. U.S. crude futures fell 24.8 per cent last year, while brent crude futures declined 19.5 per cent. Shares of S-Oil closed down 6.6 per cent, while those of GS Holdings and SK Innovation ended down 6 per cent and 5.9 per cent, respectively.

The won was quoted at 1,119 per dollar on the onshore settlement platform, 0.29 per cent weaker than its previous close at 1,115.7.

In offshore trading, the won was quoted at 1,118.74 per U.S. dollar, down 0.62 per cent from the previous day, while in one-year non-deliverable forwards it was being transacted at 1,100.95 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.59 per cent, after US stocks ended the previous session with gains. Japanese stocks weakened 0.31 per cent.

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 321,760,000 shares and, of the total traded issues of 897, the number of advancing shares was 234.

Foreigners were net sellers of 26,354 million won worth of shares.

In money and debt markets, March futures on three-year treasury bonds rose 0.08 points to 109.29.

The Korean three-month Certificate of Deposit benchmark rate was quoted at 1.93 per cent, while the benchmark three-year Korean treasury bond yielded 1.801 per cent, lower than the previous day's 1.82 per cent.

REUTERS