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Seoul: Stocks slide to near 6-week low on US data; won slips
[SEOUL] South Korean shares and the won sagged on Wednesday morning, with stocks falling to their lowest since early April, as expectations for a US interest rate hike grew on the back of strong US inflation data.
The Korea Composite Stock Price Index (KOSPI) was down 0.6 per cent at 1,956.49 points as of 0216 GMT. It touched a 10-week intraday low level shortly after the trade opened.
Higher US interest rates could dent demand for South Korean exports, turning the focus on a Federal Reserve policy meeting next month.
"The KOSPI would continue its downward trend until the US Fed's rate hike issue is resolved in June," said Kim Ye Eun, a stock analyst at LIG Investment & Securities.
Ms Kim added that Chinese companies' inclusion in the MSCI index, scheduled for the end of May, is also spurring foreign investors in South Korea to sell local equities, dragging down the KOSPI.
The inclusion would enhance China's reputation in global stock markets and China said on Tuesday that it plans to tighten rules on share suspensions beforehand.
Offshore investors had sold a net 71.8 billion Korean won (S$83.31 million) worth of KOSPI shares near mid-session.
Screenmaker LG Display Co Ltd rose 2.5 per cent while Hyundai Mobis Co Ltd was down 2.2 per cent.
Decliners far outnumbered advancers 597 to 205.
The South Korean won stepped down to a two-month low. The won stood at 1,180.2 per US dollar, down 0.6 per cent compared to the previous close of 1,173.7.
June futures on three-year treasury bonds was unchanged at 110.33.