Seoul: Stocks, won extend losses on trade war concerns

[SEOUL] South Korea's Kospi stock index and the won weakened on Monday over political risks in the European Union and concerns over softening in China's economic growth. Bond yields rose.

German Interior Minister Horst Seehofer offered his resignation to party colleagues late on Sunday, escalating Germany's political crisis over a growing divide across the EU between those who want to maintain open borders and those who want to restrict the number of migrants entering the bloc.

China's Purchasing Managers' Index (PMI) released over the weekend fell to 51.5 in June, from 51.9 in the previous month, adding to concerns about a slowdown in the world's second-biggest economy amid intensifying trade tensions with the United States.

At 0142 GMT, the Kospi was down 12.29 points or 0.53 per cent at 2,313.84. Shares of South Korea's cyclical industry material markets including steel slid on Chinese economic stagnation, which hurt investor sentiment. Domestic steel maker Posco and Hyundai Steel dropped more than 3 per cent each, while other industry material stocks such as Daewoo Engineering & Construction were down 4.4 per cent.

The won was quoted at 1,115.7 per US dollar on the onshore settlement platform , 0.11 per cent weaker than its previous close at 1,114.5.

In offshore trading, the won was quoted at 1,115.9 per US dollar, down 0.18 per cent from the previous day, while in one-year non-deliverable forwards it was being asked at 1,098.35 per US dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.03 per cent, after US stocks ended the previous session with gains . Japanese stocks weakened 0.06 per cent.

The Kospi is down around 5.7 per cent so far this year, and down by 5.39 per cent in the previous 30 days.

The current price-to-earnings ratio is 12.10, the dividend yield is 1.28 percent 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 132,688,000 shares and, of the total traded 880 issues, the number of advancing shares was 197. Foreigners were net buyers of 28,147 million won worth of shares.

The US dollar has risen 4.64 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 1,125.17 on June 27, 2018.

In money and debt markets, September futures on three-year treasury bonds fell 0.04 points to 108.02.

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 2.147 per cent, higher than the previous day's 2.12 per cent.

REUTERS