S Korean stocks fall

Published: September 09, 2017 17:27:07 | Updated: October 21, 2017 23:11:59


South Korean shares fell on Friday, as automakers led by market heavyweight Hyundai Motor dropped on worries its Chinese joint venture partner may pull out following the deployment of an anti-missile system that has angered Beijing.

South Korea's defence ministry confirmed on Wednesday that launchers of the US Terminal High Altitude Area Defence (THAAD) system would be installed to counter threats from the North, with China lodging a stern protest again on Thursday, reports Reuters.

China believes the system's radar could be used to look deeply into its territory and will upset the regional security balance.                         

The Korea Composite Stock Price Index (KOSPI) edged down 0.1 per cent to 2,343.04 as of 0237 GMT, with shares of Hyundai Motor dropping as much as 2.9 per cent.

Affiliate Kia Motors lost 2.9 per cent, while auto parts maker Hyundai Mobis plunged nearly 7 per cent.

Hyundai Motor's China plant with joint venture partner BAIC Motor Corp Ltd resumed production late on Thursday, following its suspension earlier in the week after a supplier refused to provide parts due to delays in payment - its second such incident in as many weeks.                          

"There were some media reporting that BAIC may terminate its partnership with Hyundai Motor as South Korea now has completed installing remaining four THAAD systems," said Lee Sang-Hyun, a stock analyst at IBK Securities.

"Since the company's sales in China have been doing quite well, investors seem to believe that the current situation will do take a toll on the company severely."

Tech shares however rose on expectations of robust earnings for the July-September period.

Shares of Samsung Electronics and SK Hynix rose nearly 2 per cent and 1.4 per cent, respectively.

The sub-index for electric and electronics stocks gained 1.3 per cent.

Offshore investors trimmed a net 36.1 billion won ($32 million) worth of KOSPI shares near mid-session, weighing on the index.

Decliners outnumbered advancers 586 to 210. The South Korean won        edged up, reflecting a weaker dollar after European Central Bank chief Mario Draghi suggested that the bank may begin tapering its massive stimulus programme this autumn.                        

The won was up 0.1 per cent at 1,128.3 against the dollar, from Thursday's close of 1,129.4.

September futures on three-year treasury bonds gained 0.07 point to 109.32.

Share if you like