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Seoul: Stocks trim gains as weak China data offsets Trump's trade move

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[SEOUL] South Korean shares trimmed early gains to end a tick higher on Wednesday after Washington delayed tariffs on some Chinese imports, but weak economic data from Beijing pointed to growing headwinds for global economy. The South Korean won and the benchmark bond yield strengthened.

US President Donald Trump on Tuesday backed off his Sept 1 deadline for 10 per cent tariffs on remaining Chinese imports, delaying duties on cellphones, laptops and other consumer goods, in the hopes of blunting their impact on US holiday sales.

China reported a raft of unexpectedly weak July data including a slump in industrial output to more than 17-year lows, pointing to further slowing in the economy as the US trade war takes a heavier toll on businesses and consumers.

The Seoul stock market's main Kospi ended up 12.54 points or 0.65 per cent at 1,938.37 points, after rising as much as 1.4 per cent in early trade.

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The Chinese data capped gains of the benchmark index and prompted some sell-off, as they fuelled worries over recession, said Seo Sang-young, analyst, Kiwoom Securities.

South Korea's seafood processing firms surged as investors expected sales growth of local firms after the government put pressure on Japan over radioactive water discharged from Fukushima plant.

Foreigners were net sellers of 51.0 billion won worth of shares on the main board. They registered net sales of Kospi shares for 11th consecutive session, the longest since January 2016.

The won was quoted at 1,212.7 per dollar on the onshore settlement platform, 0.78 per cent higher than its previous close at 1,222.2.

In offshore trading, the won was quoted at 1,212.5 per U.S. dollar, down 0.6 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,211.5 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.85 per cent, after US stocks rallied. Japanese stocks rose 0.98 per cent.

The Kospi dropped 5.03 per cent so far this year, and lost 9.2 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 in the Kospi index was 686.99 million shares and, of the total traded issues of 895, the number of advancing shares was 508.

The won lost 8.0 per cent against the US dollar so far this year.

In money and debt markets, September futures on three-year treasury bonds dipped 0.04 point to 111.31, while the three-month Certificate of Deposit rate was quoted at 1.49 per cent.

The most liquid three-year Korean treasury bond yield dropped by 0.4 basis points to 1.148 per cent, while the benchmark 10-year yield rose by 0.3 basis point to 1.233 per cent. 

REUTERS