South Korean shares turn lower as Middle East crisis keeps oil elevated

SEOUL: Round-up of South Korean financial markets:   South Korean shares erased early gains to trade lower on Monday as heightening uncertainty over hostilities in the Middle Eastcontinued to keep oil prices elevated.

The benchmark KOSPI was down 28.59 points, or 0.52%, at 5,458.65 as of 0228 GMT, after rising as much as 1.35% earlier in the session.

“News flow on the Middle East situation is changing every hour, implying renewed possibilities of oil price volatility triggering stock market volatility,” said Han Ji-young, analyst at Kiwoom Securities.

President Donald Trump said on Sunday his administration is talking to seven countries about helping to secure the Strait of Hormuz amid the US-Israeli war on Iran, calling on them to help protect ships in the waterway that Tehran has mostly blocked.

Oil prices pared gains after Trump’s remarks, with Brent crude futures falling 0.23% to $102.90 a barrel by 0049 GMT after settling $2.68 higher on Friday.

South Korea’s ruling Democratic Party said on Monday that the government will lift limits on coal-fired power generation capacity and raise nuclear power plant utilisation as part of an energy response to the Middle East crisis.

The ruling party also said the government will draw up a supplementary budget by the end of this month to support those hit by surging oil prices.

Among index heavyweights, chipmaker Samsung Electronics rose 0.27%, while peer SK Hynix gained 1.98%. Battery maker LG Energy Solution slid 1.36%.

Of the total 924 traded issues, 210 shares advanced, while 675 declined.

Foreigners were net sellers of shares worth 517.6 billion won ($345.60 million).

The won was quoted at 1,496.8 per dollar on the onshore settlement platform, 0.05% higher than its previous close at 1,497.5.

The most liquid three-year Korean treasury bond yield fell by 3.4 basis points to 3.305%, while the benchmark 10-year yield rose by 3.3 basis points to 3.713%.‑Reuters