Seoul: Stocks, won slide on North Korea tensions

[SEOUL] South Korean shares slipped on Wednesday as renewed tensions between North Korea and the United States dampened market sentiment, while investors awaited fresh clues on the progress of US-China trade talks. The won hit a near three-week low, while benchmark bond yields also declined.

North Korea has restored part of a missile launch site it began to dismantle after pledging to do so in a first summit with US President Donald Trump last year, South Korea's Yonhap News Agency and two US think tanks reported on Tuesday.

Mr Trump's national security adviser, John Bolton, said the United States would look at ramping up sanctions on North Korea if Pyongyang did not scrap its nuclear weapons programme.

The benchmark Kospi index closed down 3.63 points, or 0.17 per cent, to 2,175.60 points, extending its losses into a fourth session.

Foreigners were net sellers of 9.7 billion won worth of shares on the main board. The won was quoted at 1,128.8 per dollar on the onshore settlement platform, 0.29 per cent lower than its previous close at 1,125.5. The currency fell for a fifth straight session, its longest losing streak since October 2018.

Local dealers said renewed worries over North Korea and the Chinese yuan's recent losses weighed on the currency market. The flow of Australian dollars may have been a trigger for the currency moves in emerging markets, reflecting global growth concerns, said one of the dealers.

The Australian economy expanded just 0.2 per cent in the fourth quarter, slower than the 0.3 per cent increase economists had forecast in a Reuters poll. The Australian dollar hit a two-month low after its economic data release.

In offshore trading, the won was quoted at 1,128.9 per US dollar, down 0.4 per cent from the previous day, while in one-year non-deliverable forward trading its one-month contract was quoted at 1,127.9 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.14 per cent, after US stocks ended the previous session with mild losses. Japanese stocks fell 0.60 per cent.

The Kospi has risen 6.59 per cent so far this year, and rose 3.5 per cent in the previous 30 trading sessions.

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 320.13 million shares and, of the total traded issues of 895, the number of advancing shares was 366.

The won has lost 1.2 per cent against the US dollar this year.

In money and debt markets, March futures on three-year treasury bonds rose 0.03 point to 109.17, while the three-month Certificate of Deposit rate was quoted at 1.89 per cent.

The most liquid three-year Korean treasury bond yield fell by 1.0 basis point to 1.826 per cent, while the benchmark 10-year yield fell by 1.4 basis points to 2.016 per cent.

REUTERS