South Korean shares end lower on caution ahead of elections, US data

SEOUL: Round-up of South Korean financial markets:

South Korean shares ended lower on Tuesday as investors maintained a cautious stance and refrained from placing major bets ahead of the country’s parliamentary elections and U.S. inflation data this week.

The benchmark KOSPI closed 0.46% lower at 2,705.16, shedding early gains of nearly 1%.

“Risk sentiment weakened on worries about a delay in U.S. rate cuts and ahead of its inflation data, while undervalued stocks, which had benefited from the government’s corporate reform push, were mixed ahead of elections,” said Lee Kyoung-min, analyst, Daishin Securities.

Analysts expect the “Corporate Value-up Programme” to continue regardless of the election turnout as both parties support the government’s plan to boost stock markets. The Yoon administration’s plan to abolish capital gains taxes, which requires parliamentary approval, remains an issue the opposition party could oppose.

Globally, financial markets are keen on U.S. inflation data due later in the week to gauge the timing of the Federal Reserve’s interest rate cuts.

South Koreans go to polls on Wednesday to elect a 300-member parliament. The market will be closed for the election.

The Bank of Korea will keep its key policy rate unchanged for a 10th straight meeting on Friday and is expected to embark on a shallow cutting cycle next quarter, according to a Reuters poll.

Shares of Samsung Electronics ended 1.07% lower at 83,600 won, after about 5.25 million shares were priced at 84,100 won per share in a block sale worth about 441 billion won ($325.51 million).

Battery maker LG Energy Solution pared most of its intraday gains to end 0.27% higher. Shares of LG Energy’s U.S. customer Tesla jumped overnight on plans to unveil a self-driving Robotaxi.

Foreigners were net sellers of shares worth 133.9 billion won on the main board.

The won ended onshore trade at 1,354.9 per dollar, compared with its previous close at 1,353.2.

The most liquid three-year Korean treasury bond yield rose 0.8 basis point to 3.394%, while the benchmark 10-year yield climbed 2.0 bps to 3.509%.