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Seoul: Stocks, won drop on US-China trade spat

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[SEOUL] South Korea's Kospi stock index and the won fell on Monday amid fears of an escalating US-China trade spat after Washington set hefty tariffs on some Chinese goods. Bond yields also fell.

At 0630 GMT, the Kospi was down 27.71 points, or 1.15 per cent, at 2,376.33. As trade tensions between the United States and China may potentially reduce demand for South Korean chips, market heavyweight Samsung Electronics dropped 2.2 per cent to its lowest since a 50:1 stock split in May. SK Hynix, the nation's second biggest chipmaker, fell 3.5 per cent. Steelmaker Posco also declined 2.5 per cent.

The won was quoted at 1,104.8 per US dollar on the onshore settlement platform, 0.64 per cent weaker than its previous close at 1,097.7, extending losses into a fourth session to hit a seven-month closing low.

In offshore trading, the won was quoted at 1,104.35 per US dollar, down 0.18 per cent from the previous day, while in one-year non-deliverable forwards it was being asked at 1,087.5 per US dollar.

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MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.43 per cent, after US stocks ended the previous session with losses. Japanese stocks weakened 0.75 per cent.

The Kospi is down around 2.6 per cent so far this year, and down by 3.55 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 (S$1.52 trillion).

The trading volume during the session on the Kospi index was 558,942,000 shares and, of the total traded issues of 886, the number of advancing shares was 172. Foreigners were net sellers of 285,752 million won worth of shares.

The US dollar has risen 3.56 per cent against the won this year. The won's high for the year is 1,053.55 per US dollar on April 2, 2018 and low is 1,106.2 on June 18, 2018.

In money and debt markets, June futures on three-year treasury bonds rose 0.07 points to 108.06.

The Korean 3-month Certificate of Deposit benchmark rate was quoted at 1.65 per cent, while the benchmark 3-year Korean treasury bond yielded 2.176 per cent, lower than the previous day's 2.19 per cent.

REUTERS