Seoul: Stocks, won fall on concerns over global growth, trade

[SEOUL] South Korea's Kospi stock index and the won fell on Monday, weighed down by global growth concerns as well as fears over trade tensions between Washington and Beijing. South Korean bond yields also dropped.

US jobs growth slowed in November and monthly wages rose less than forecast, suggesting some moderation in economic activity that could support expectations of fewer interest rate increases from the Federal Reserve in 2019.

The Japanese economy contracted the most in over four years in the third quarter as companies slashed spending, threatening to chill the investment outlook in 2019 as the export-reliant nation grapples with slowing global growth and trade frictions.

Worries over the US-China trade dispute were reignited by news last week that Canadian officials had arrested the chief financial officer of Chinese smartphone maker Huawei for extradition to the United States. The arrest could throw up another hurdle to the resolution of a trade war between the world's top two economies.

Hackers behind a massive breach at hotel group Marriott International Inc left clues suggesting they were working for a Chinese government intelligence gathering operation, according to sources familiar with the matter. FBI spokesman said on Friday that the agency was looking into the attack, but declined to elaborate.

At 0632 GMT, the KOSPI closed down 21.99 points or 1.06 per cent at 2,053.77. Shares of Samsung Electronics fell 1.8 per cent, hitting its lowest close since March 2017.

Shares of South Korean mobile games makers dropped after a report that Chinese regulators have set up a new online games ethics committee and reviewed 20 titles already. Investor sentiment over games industries will likely be dented as the launch of the committee indicates that the Chinese government is aiming to tighten regulations on the industry, said Kim Hak-joon, an analyst at Kiwoom Securities. Shares of Webzen Inc and WeMade Entertainment Co Ltd closed down 12.8 per cent and 9.7 per cent, respectively, while Netmarble Corp ended down 6.2 per cent.

The won was quoted at 1,126.5 per dollar on the onshore settlement platform, 0.59 per cent weaker than its previous close at 1,119.8.

In offshore trading, the won was quoted at 1,126.75 per US dollar, down 0.26 per cent from the previous day, while in one-year non-deliverable forwards it was being asked at 1,107.15 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.52 per cent, after US stocks ended the previous session with mild losses. Japanese stocks weakened 2.12 per cent.

The Kospi is down around 15.9 per cent so far this year, and down by 2.40 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 335,913,000 shares and, of the total traded issues of 895, the number of advancing shares was 173.

Foreigners were net sellers of 270,876 million won worth of shares.

The US dollar has risen 5.66 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 1,146.26 on Oct 11, 2018.

In money and debt markets, December futures on three-year treasury bonds rose 0.02 points to 109.2.

The Korean three-month Certificate of Deposit benchmark rate was quoted at 1.9 per cent, while the benchmark three-year Korean treasury bond yielded 1.807 per cent, lower than the previous day's 1.81 per cent.

REUTERS