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South Korea: Shares drop on recession fears, global political woes

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[SEOUL] South Korean shares slipped on Tuesday on heightened recession worries as US yield curve flattened significantly, amid persisting trade worries and global political tensions. The Korean won and the benchmark bond yield also declined, as investors flocked to safe haven assets.

The yield spread between US 2-year and 10-year notes, a closely watched metric, narrowed to 5.3 basis points, the smallest difference since at least 2010, according to Refinitiv data.

As of 0156 GMT, the Seoul stock market's main KOSPI fell 16.60 points, or 0.85 per cent to 1,925.69.

Shares of E-Mart surged after the retailer announced plan to sell its assets and buy back shares.

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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 in the KOSPI index was 277.70 million shares and, of the total traded issues of 892, the number of advancing shares was 302.

The KOSPI has fallen 5.40 per cent so far this year, and lost 8.8 per cent in the previous 30 trading sessions.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.57 per cent, after US stocks stumbled. Japanese stocks fell 1.15 per cent.

Foreigners were net sellers of 78.5 billion won ($64.43 million) worth of shares on the main board, extending their successive net selling into a 10th session. It would be the longest selling spree since January 2016, if they post net selling until the market closing.

The won was quoted at 1,218.5 per US dollar on the onshore settlement platform, 0.19 per cent lower than its previous close at 1,216.2. 

In offshore trading, the won was quoted at 1,218.3 per US dollar, unchanged from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,217.1 per dollar.

The won has lost 8.4 per cent against the U.S dollar so far this year.

In money and debt markets, September futures on three-year treasury bonds rose 0.08 points to 111.29, while the 3-month Certificate of Deposit rate was quoted at 1.49 per cent.

The most liquid 3-year Korean treasury bond yield fell by 2.0 basis points to 1.163 per cent, while the benchmark 10-year yield fell by 3.6 basis points to 1.250 per cent.

REUTERS