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Seoul: Stocks slip; all eyes on Fed, Trump-Xi meeting

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[SEOUL] South Korea's Kospi index declined on Friday as investors awaited the outcome of next week's US Federal Reserve meeting, amid uncertainties over a meeting of US President Donald Trump and his Chinese counterpart Xi Jinping at the G-20 summit later this month. The South Korean won and the benchmark bond yield fell.

The Seoul stock market's main KOSPI closed down 7.72 points or 0.37 per cent, at 2,095.43. For the week, the benchmark index added 1.1 per cent.

Investors have adapted a "wait-and-watch" mode as they await a clear signal from the Fed's policy meeting, while watching the outcome of the Sino-US meeting at the G-20 summit (later this month), said Ha In-hwan, an analyst from Meritz Securities. The cautions would cap gains for some time, Ha added.

The Federal Open Market Committee's (FOMC) two-day policy meeting is set to begin on Tuesday. The Fed is not widely expected to cut rates when it meets on June 18-19, though investors will watch for new signals that a cut may come in July.

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Mr Trump and Mr Xi will likely meet on the sidelines of the Group of 20 summit later this month in Japan, a White House spokesman said on Thursday, although he suggested a meeting was not yet firmly scheduled.

Foreigners were net sellers of 69.6 billion won worth of shares on the main board.

The won was quoted at 1,185.3 per dollar on the onshore settlement platform, 0.19 per cent lower than its previous close at 1,183.1. The currency lost 0.3 per cent from a week ago.

In offshore trading, the won was quoted at 1,185.0 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 1,183.7 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.46 per cent, after US stocks climbed. Japanese stocks rose 0.40 per cent.

The Kospi has risen 2.66 per cent so far this year, but lost 5.1 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 465.63 million shares and, of the total traded issues of 891, the number of advancing shares was 279.

The won has lost 5.9 per cent against the US dollar so far this year.

In money and debt markets, June futures on three-year treasury bonds rose 0.07 point to 110.25, while the three-month Certificate of Deposit rate was quoted at 1.81 per cent.

The most liquid three-year Korean treasury bond yield fell by 1.3 basis points to 1.467 per cent, while the benchmark 10-year yield fell by 2.4 basis points to 1.588 per cent. 

REUTERS