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Seoul: Stocks, won slide on hawkish Fed minutes, US currency report; BOK holds rates

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[SEOUL] South Korea's stock index and the won ended lower on Thursday, tracking losses in the Chinese market after the release of US Federal Reserve minutes and a semi-annual currency report.

South Korea's central bank kept monetary policy steady on Thursday for a seventh straight meeting, as it assessed new signs of softness in the economy and the potential fallout from global trade frictions. With the BOK decision, December futures on three-year treasury bonds rose 0.06 point to 108.53. At 0631 GMT, the Kospi closed down 19.20 points or 0.89 per cent at 2,148.31.

As US Commerce Secretary Wilbur Ross said trade negotiations with China appear to have taken a brief pause, there are still lingering concerns over the US-China trade spat, says Huh Jae-hwan, an analyst at Eugene Investment & Securities.

Federal Reserve policymakers are largely united on the need to raise borrowing costs further, minutes from their most recent policy meeting show, despite US President Donald Trump's view that interest rate hikes have already gone too far.

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Even though the US refrained from labelling China a currency manipulator, US Commerce Secretary Wilbur Ross said in an interview with CNBC on Wednesday that trade negotiations with China appear to have taken a brief pause, dampening expectations that an agreement would come out of an upcoming G-20 meeting.

Shares of South Korea's Hyundai Motor Co and its affiliates drop after US Senate panel said they had asked top US executives of Hyundai Motor Co and affiliate Kia Motors Corp to testify at a Nov 14 hearing over engine fire reports.

Shares of South Korean companies related to the marijuana business jump after recreational marijuana becomes legal in Canada. BioVill Co Ltd, which acquired a licence for recreational marijuana and has permission to distribute medical marijuana, surged 29.8 per cent.

The won was quoted at 1,135.2 per dollar on the onshore settlement platform, 0.77 per cent weaker than its previous close at 1,126.5. In offshore trading, the won was quoted at 1,135.09 per US dollar, down 0.67 per cent from the previous day, while in one-year non-deliverable forwards it was being asked at 1,116.45 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.66 per cent, after US stocks ended the previous session with losses. Japanese stocks weakened 0.8 per cent. The KOSPI is down around 12.2 per cent so far this year, and down by 6.13 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 316,734,000 shares and, of the total 897 traded issues, the number of advancing shares was 256.

Foreigners were net sellers of 40,128 million won worth of shares. The US dollar has risen 6.44 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. The South Korean three-month Certificate of Deposit benchmark rate was quoted at 1.69 per cent, while the benchmark three-year Korean treasury bond yielded 1.987 per cent, lower than the previous day's 2.02 per cent.

REUTERS