Seoul: Stocks shrug off North Korea risk; won drops

[SEOUL] South Korea's Kospi stock index jumped on Friday, shrugging off geopolitical risks after North Korea said it was considering suspending nuclear talks with the United States. The Korean won hit its lowest intraday level since November 2018 following the report, but recouped some of its losses. The benchmark bond yield rose.

North Korea is considering suspending talks with the United States and may rethink a ban on missile and nuclear tests unless Washington makes concessions, news reports from the North's capital on Friday quoted a senior diplomat as saying.

The Seoul stock market's main Kospi index added 20.43 points or 0.95 per cent to 2,176.11 points. For the week, the index added 1.8 per cent. South Korea's entertainment shares shrank over increased uncertainties in the industry following a series of sex scandals involving K-pop stars.

Shares exposed to North Korea plunged while those of defence-related firms surged, after the North Korea report.

Foreigners were net sellers of 114.8 billion won worth of shares on the main board.

The won was quoted at 1,137.3 per dollar on the onshore settlement platform, 0.22 per cent lower than its previous close at 1,134.8. The currency barely changed from a week ago.

In offshore trading, the won was quoted at 1,136.7 per US dollar, down 0.1 per cent from the previous day, while in one-year non-deliverable forward trading its one-month contract was quoted at 1,136.6 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.66 per cent, after US stocks ended steady. Japanese stocks rose 0.77 per cent.

The Kospi has risen 6.62 per cent so far this year, but fallen 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 373.55 million shares and, of the total traded issues of 898, the number of advancing shares was 352.

The won has lost 1.9 per cent against the US dollar this year.

In money and debt markets, March futures on three-year treasury bonds fell 0.07 points to 109.19, while the three-month Certificate of Deposit rate was quoted at 1.90 per cent.

The most liquid three-year Korean treasury bond yield rose 1.1 basis points to 1.804 per cent, while the benchmark 10-year yield increased 1.1 basis points to 1.988 per cent.

REUTERS