S.Korea won, shares tumble to over 1-month lows as US-N.Korea tensions heat up (updated)

LIG Defense & Aerospace

09/08/2017 03:08

* Trump warns "fire and fury" for North Korea if it 
threatens U.S. 
    * Won, KOSPI both fall nearly 1 pct 
    * Foreign investors set to be net sellers of Seoul shares 
 
 (adds analyst comment, updates on figures) 
    SEOUL, Aug 9 (Reuters) - The South Korean won  KRW=  and 
shares  .KS11  extended losses to more than one-month lows on 
Wednesday after North Korea said it is considering plans for a 
missile strike on the U.S. Pacific territory of Guam. 
 urn:newsml:reuters.com:*:nL4N1KU6P0 
    The statement came just hours after President Donald Trump 
told the North that any threat to the United States would be met 
with "fire and fury", rattling global financial 
markets. urn:newsml:reuters.com:*:nL4N1KV00Y 
    The Korea Composite Stock Price Index (KOSPI) was down 0.7 
percent at 2,377.17 points by 0138 GMT. It fell to as low as 
2,371.28 earlier, its lowest intraday level since June 23. 
    Despite more frequent sabre-rattling by the North, the index 
has been among the strongest performers in the world so far this 
year, gaining more than 17 percent.    
    The won  KRW=KFTC  sank around 0.8 percent to 1,134.4 to the 
dollar, its weakest since July 14. 
    "The won has recently been reacting quite sensitively to 
Trump's comments and investors' anxieties worsened today as the 
North came up with an aggressive response," said Jung Sung-yoon, 
a foreign exchange analyst at Hyundai Futures. 
    Foreign investors turned sellers after buying on Monday and 
Tuesday, with large tech shares Samsung Electronics  005930.KS  
and SK Hynix  000660.KS  falling 1.8 percent and 2.4 percent, 
respectively. 
    The sub-index for techs  .KS41  fell nearly 2 percent.  
    "That's what usually happens when there is a great concern 
over geopolitical issues with North Korea," said Kim Ye-eun, a 
stock analyst at Cape Investment & Securities. 
    Offshore investors offloaded a net 52 billion won ($45.84 
million) worth of KOSPI shares near mid-session. 
    But shares of defence-related companies rose, with LIG Nex1 
Co Ltd  079550.KS  up nearly 5 percent and Firstec  010820.KS  
up 3 percent.  
    Washington has warned it is ready to use force if need be to 
stop North Korea's ballistic missile and nuclear programmes but 
that it prefers global diplomatic action, including sanctions. 
    The spread on South Korea's 5-year credit default swaps 
 KRGV5YUSAC=MG  stood at 56.4 basis points and risk reversals in 
won options  KRW3MRR=  at 1.2 points, both well below their last 
highs seen in April. 
    September futures on three-year treasury bonds  KTBc1  shed 
0.15 point to 109.98. 
     
                       0138 GMT    Prev close 
 Dollar/won             1,134.4       1,125.1 
 Yen/won             10.3166/39       10.2255 
 *KTB futures            109.98        109.13 
 KOSPI                 2,377.17      2,394.73 
 * Front-month futures on three-year treasury bonds 
     
 
 (Reporting by Dahee Kim; Editing by Kim Coghill) 
 ((Dahee.Kim@thomsonreuters.com; +82 2 3704 5643; Reuters 
Messaging: dahee.kim@thomsonreuters.com)) 
 
Keywords: SOUTHKOREA MARKETS/