Seoul: Stocks tumble on Fed hike, 2019 rates outlook

[SEOUL] South Korea's Kospi stock index weakened on Thursday as the US Federal Reserve stuck to its outlook for continued policy tightening next year, suppressing hopes that the Fed will adopt a dovish stance in the face of softening global growth. The won fell while bond yields rose.

At 0632 GMT, the Kospi was down 18.72 points or 0.90 per cent at 2,060.12. The benchmark index fell nearly 21 per cent since its peak in January.

South Korea's electric and electronic sub-index dropped on worries of weak smartphone demand. SK Hynix fell more than 3 per cent to a one-and-a-half-year low, while LG Innotek slid more than 4 per cent to the lowest in nearly two years.

US chipmaker Micron Technology Inc has joined its South Korean rivals Samsung Electronics Co Ltd and SK Hynix in warning about a market glut of memory chips as consumer and business demand for phones and computers is weakening.

Shares of Kakao Corp ended down 4.6 per cent as tens of thousands of South Korean taxi drivers walked off the job and held a rally on Thursday to protest against a car-pooling service Kakao Mobility, a unit of mobile messenger operator Kakao Corp, that they say would destroy their jobs and threaten their livelihoods.

The won was quoted at 1,127.8 per dollar on the onshore settlement platform, 0.38 per cent weaker than its previous close at 1,123.5.

In offshore trading, the won was quoted at 1,127.85 per US dollar, up 0.08 per cent from the previous day, while in one-year non-deliverable forwards it was being asked at 1,108.75 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.25 per cent, after US stocks ended the previous session with mild losses. Japanese stocks weakened 2.84 per cent.

The Kospi is down around 15.8 per cent so far this year, and down by 0.01 per cent in the previous 30 days.

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 412,812,000 shares and, of the total 895 traded issues, the number of advancing shares was 310.

Foreigners were net sellers of 42,020 million won worth of shares.

The US dollar has risen 5.77 per cent against the won this year. The won's high for the year is 1,053.55 per dollar on April 2 and low is 1,146.26 on Oct 11.

In money and debt markets, March futures on three-year treasury bonds fell 0.05 point to 109.34.

The South Korean three-month Certificate of Deposit benchmark rate was quoted at 1.9 per cent, while the benchmark three-year Korean treasury bond yielded 1.798 per cent, higher than the previous day's 1.79 per cent.

REUTERS