Seoul: Stocks skid 1.5% on foreign investor selling amid HK unrest

[SEOUL] South Korean shares slid 1.5 per cent on Friday as foreign investors sold local equities amid persistent worries about Hong Kong unrest and uncertainty over the prospects of a US-China trade deal. The won and the benchmark bond yield also dropped.

Hong Kong braced for a fresh round of protests over the weekend as police said they would withdraw from a university on Friday that has been the site of some of the worst clashes between protesters and security forces in nearly six months of unrest.

Selling by foreigners was the main reason for Friday's fall, said Seo Sang Young, an analyst at Kiwoom Securities. Hong Kong shares dropped nearly 2 per cent, putting pressure on South Korean shares, he added.

South Korea's central bank left interest rates steady even as it trimmed growth and inflation projections, underlining a cautious view on the economy in the face of global risks and cementing market bets for more policy easing next year.

The Seoul stock market's main Kospi ended down 30.63 points, or 1.45 per cent, at 2,087.96, its lowest close in a month.

The benchmark index fell 0.67 per cent from a week ago, while it was little changed from a month ago.

Foreigners were net sellers of 450.9 billion won (S$523.1 million) worth of shares on the main board.

Foreign investors sold net 1.83 trillion won worth of Kospi shares this week, the biggest since late August 2015, according to preliminary Refinitiv data.

The won was quoted at 1,181.2 per US dollar on the onshore settlement platform, 0.19 per cent lower than its previous close at 1,179.0.

The currency slipped 0.2 per cent on a weekly basis and 1.5 per cent on the month.

In offshore trading, the won was quoted at 1,180.9 per US dollar, down 0.2 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,177.5 per US dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.14 per cent, after US stocks were closed overnight. Japanese stocks fell 0.49 per cent.

The Kospi has risen 2.3 per cent this year and gained 2 per cent in the previous 30 trading sessions.

The trading volume during the session in the Kospi index was 421.40 million shares and, of the total traded issues of 907, the number of advancing shares was 212.

The won has lost 5.5 per cent against the US dollar this year.

In money and debt markets, December futures on three-year treasury bonds rose 0.10 point to 110.46, while the three-month Certificate of Deposit rate was quoted at 1.53 per cent in late afternoon trade.

The most liquid three-year Korean treasury bond yield fell by 4.8 basis points to 1.384 per cent in late afternoon trade, while the benchmark 10-year yield declined by 4.2 basis points to 1.627 per cent.

REUTERS