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South Korea: Stocks slip more than 1% on US-China trade tensions

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[SEOUL] The Korea Composite Stock Price Index (KOSPI) fell on Tuesday, hit by tensions stemmed from US-China trade stand-off and North Korea's "strike drill" testing.

The Seoul stock market's main KOSPI fell 22.39 points, or 1.02 per cent, to 2,173.93 points at 0157 GMT.

Foreigners were net buyers of 144.2 billion won (S$168 million) worth of shares on the main board.

Investors' sentiment was dented due to unexpected "strike drill" testing by North Korea and US-China trade stand-off, and there's a need to monitor the development of the two issues, said Kim Young-hwan, an analyst at KB Securities.

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South Korean shares of companies exposed to North Korea fell after the latter conducted a "strike drill" on Saturday, while shares of defence firms rose.

The purpose of the drill was to test performance of "large-caliber long-range multiple rocket launchers and tactical guided weapons by defense units", the Korean Central News Agency said.

US President Donald Trump on Monday slammed China over its trade practices, saying the United States was losing billions to Beijing and vowing to protect American commerce as tension escalated following his weekend threat to hike tariffs.

 

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.38 per cent, after US stocks fell. Japanese stocks declined by 0.96 per cent.

The KOSPI has risen 6.51 per cent so far this year, and rose 0.5 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 211.83 million shares and, of the total traded issues of 891, the number of advancing shares was 146.

Meanwhile, the Korean won weakened and the benchmark bond yield fell.

The won was quoted at 1,171.3 per US dollar on the onshore settlement platform, 0.11 per cent lower than its previous close at 1,170.0. 

In offshore trading, the won was quoted at 1,169.3 per US dollar, down 0.1 per cent from the previous day.

The won has lost 4.7 per cent against the US dollar this year.

In money and debt markets, June futures on three-year treasury bonds rose 0.08 points to 109.53, while the three-month Certificate of Deposit rate was quoted at 1.84 per cent.

The most liquid three-year Korean treasury bond yield fell by 2.2 basis points to 1.717 per cent, while the benchmark 10-year yield fell by 3.1 basis points to 1.869 per cent.

REUTERS