South Korean shares set for biggest quarterly drop since early 2020

SEOUL: Round-up of South Korean financial markets:  

South Korean shares erased early gains to trade lower on Wednesday, weighed down by concerns over high bond yields, and were set for their biggest quarterly drop in 6-1/2 years.

The benchmark KOSPI was down 3.01 points, or 0.04%, at 6,867.80, as of 0253 GMT, after rising as much as 1.4% earlier in the session.

The KOSPI has fallen 19% so far this quarter after rising for six consecutive quarters, heading for its biggest quarterly loss since the first quarter of 2020.

US stocks ended slightly lower on Tuesday, as government bond yields continued their ascent ahead of inflation and labour market data, while investors assessed comments from Federal Reserve officials for the path of interest rates.

South Korea’s finance minister said authorities were closely monitoring bond markets and would take market-stabilising measures if bond yields rose excessively.

South Korea’s factory output unexpectedly fell in August, data showed.

Chipmaker Samsung Electronics fell 1.01%, erasing early gains, while peer SK Hynix was up 1.19% after rising more than 3%.

Among other index heavyweights, battery maker LG Energy Solution climbed 0.99%, while Hyundai Motor and sister automaker Kia Corp were down 0.86% and 1.38%, respectively.

Steelmaker POSCO Holdings added 0.33%, while drugmaker Samsung BioLogics rose 1.08%.

Of the total 911 traded issues, 406 shares advanced, while 453 declined.

Foreigners were net sellers of shares worth 519.1 billion won ($382.99 million).

The won was quoted at 1,354.2 per dollar on the onshore settlement platform, 0.01% lower than its previous close at 1,354.0.

In money and debt markets, December futures on three-year treasury bonds gained 0.16 point to 102.35.

The most liquid three-year Korean treasury bond yield fell by 5.1 basis points to 4.021%, while the benchmark 10-year yield fell by 4.6 basis points to 4.424%.