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Seoul: Stocks wobble on global growth concerns; won gains
[SEOUL] South Korea's KOSPI stock index dipped on Tuesday as deepening concerns over a slowing global economy sent Wall Street tumbling overnight. The Korean won rose ahead of the U.S. central bank monetary decision while bond yields fell.
Wall Street's major indexes slid more than 2 per cent overnight, with the benchmark S&P 500 closing at its lowest in 14 months, on concerns about slowing economic growth ahead of a highly anticipated decision from the Federal Reserve this week on the course of U.S. interest-rate hikes.
Two days before the Federal Reserve is expected to raise interest rates for a fourth time this year, US President Donald Trump and his top trade adviser on Monday ratcheted up their criticism of the central bank's monetary tightening.
Investors have bet heavily that the US central bank will raise rates at the end of its two-day policy meeting on Wednesday. Many economists also see the Fed increasing rates next year, although at a slower pace.
At 0633 GMT, the Kospi was down 8.98 points or 0.43 per cent at 2,062.11.
Shares of hydrogen-powered car parts companies surged after South Korea unveiled a policy package to provide financial support worth over 3.5 trillion won in car parts makers industry while encouraging the use of electric cars. It plans to expand the budget for subsidies on electric and hydrogen vehicles next year, which can apply to 42,000 electric cars from the current level of 26,500, the government added. Shares of PungkukAlcholnd jumped 29.7 per cent while Inzi Controls Co Ltd and Neuros Co Ltd rose 18.4 per cent and 11.8 per cent, respectively.
The won was quoted at 1,129.6 per dollar on the onshore settlement platform, 0.15 per cent firmer than its previous close at 1,131.3.
In offshore trading, the won was quoted at 1,129.31 per U.S. dollar, down 0.1 per cent from the previous day, while in one-year non-deliverable forwards it was being asked at 1,108.9 per dollar.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.76 per cent, after US stocks ended the previous session with big losses. Japanese stocks weakened 1.82 per cent.
The Kospi is down around 16.1 per cent so far this year, and down by 0.28 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 423,880,000 shares and, of the total traded issues of 893, the number of advancing shares was 294.
Foreigners were net sellers of 170,870 million won worth of shares.
The US dollar has risen 5.9 per cent against the won this year. The won's high for the year is 1,053.55 per dollar on April 2 and the low is 1,146.26 on Oct 11.
In money and debt markets, December futures on three-year treasury bonds fell 0.03 point to 109.13.
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 1.788 per cent, lower than the previous day's 1.80 per cent.