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Seoul: Won, shares extend falls after weak China flash PMI
[SEOUL] The South Korean won and Seoul shares weakened early on Wednesday as Chinese factory data for September came in below forecasts, fuelling concern over the health of the world's second-biggest economy.
The won was down 0.8 per cent at 1,188.7 per dollar as of 0213 GMT after touching a morning low of 1,188.9, its weakest level since Sept 10. Currency watchers expect it to fall for a third straight day.
The preliminary Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) fell to 47.0 in September from August's revised 47.3, the worst since March 2009 and below market expectations of 47.5. "China's weak PMI rekindled worries over the economy after overnight falls in global stock markets already weighing on sentiment," said Yuna Park, a foreign exchange analyst at Dongbu Securities.
Ms Park said the won could weaken further, to around 1,190 versus the dollar, but that with month-end settlements due soon local exporters would be likely to increase selling of dollars in favour of domestic currency, providing the won some support.
On the stock market, the Korea Composite Stock Price Index (KOSPI) was down 1.4 per cent at 1,954.62 points. Losers easily outnumbered gainers by a factor of four to one.
Steelmaker Posco fell 3.3 per cent, while market heavyweight Samsung Electronics Co Ltd slipped 1.1 per cent. Automakers also lost ground, with Hyundai Motor Co Ltd down 3.1 per cent and its affiliate Kia Motors Corp off 3.0 per cent.
Foreigners were set to be net sellers for a third consecutive session, offloading a net 241.7 billion won (S$289.1 million) worth of shares in morning trade.
December futures on three-year treasury bonds stood at 109.74, unchanged from the previous close.