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Seoul: Stocks tumble on global trade war worries, won recovers

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[SEOUL]  South Korea's Kospi stock index weakened on Tuesday as concerns over a tariff war between the US and other major economies deterred investors from taking risks. The Korean won closed recovering from the loss in its previous close, and bond yields inched upl. 

The US Treasury Secretary Steven Mnuchin said on Monday that the new investment curbs from the department will not be specific to China but would apply "to all countries that are trying to steal our technology", whereas the White House trade and manufacturing adviser Peter Navarro said that any investment restrictions proposed by the current administration would target China and not other countries. The French finance minister warned Europe will retaliate after US President donald Trump threatened to hit imported cars assembled in European Union with a 20 per cent tariff, heightening risks of a global trade war.

At 06:32 GMT, the Kospi was down 6.96 points or 0.30 per cent at 2,350.92. While tech giant Samsung Electronics gained 0.8 per cent, South Korean steel producer Posco dipped as much as 3.4 per cent. LG Display closed at 3.2 per cent loss, as its intraday low hit the lowest since 2011.

The won was quoted at 1,114.8 per dollar on the onshore settlement platform, 0.22 per cent firmer than its previous close at 1,117.2, recovering from the lowest finish since November. In offshore trading, the won was quoted at 1,113.81 per U.S. dollar, up 0.06 per cent from the previous day, while in one-year non-deliverable forwards it was being asked at 1,097.25 per dollar. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.23 per cent, after U.S. technology shares took a hit overnight, with the S&P 500 and Nasdaq suffering their steepest losses in more than two months. Japanese stocks rose 0.02 per cent. The Kospi is down around 4.4 per cent so far this year, and down by 3.52 per cent in the previous 30 days. 

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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 460,975,000 shares and, of the total traded issues of 887, the number of advancing shares was 253. ** Foreigners were net sellers of 347,669 million won worth of shares.  The US dollar has risen 4.45 per cent against the won this year. The won's high for the year is 1,053.55 per dollar on April 2 2018 and low is 1,118.22 on June 25 2018.

In money and debt markets, September futures on three-year treasury bonds fell 0.03 points to 107.94. The South Korean three-month Certificate of Deposit benchmark rate was quoted at 1.65 per cent, while the benchmark three-year South Korean treasury bond yielded 2.147 per cent, higher than the previous day's 2.15 per cent.

REUTERS