S.Korea won touches a 4-year low; shares hit lowest since February

The South Korean won fell sharply to its weakest in almost four years against the dollar on Wednesday morning, while stocks slid to a near six-month low after China's central bank weakened the yuan's official mid-point for a second day. The South Korean won was down 1 percent at 1,190.7 on the dollar. The won slid as much as 1.1 percent to 1,192.8, its lowest since Oct. 5, 2011. Local traders suspected dollar-selling smoothing operations by foreign exchange authorities to curb the won's sharp fall. "The won fell sharply after China's central bank's announcement, in line with other currencies such as the Singapore dollar and the Australia dollar," said Jeon Seung-ji, a foreign-exchange analyst at Samsung Futures. Jeon added the local currency could further fall for a while, tracking the Chinese yuan. On the stock market, the Korea Composite Stock Price Index (KOSPI) was down 1.4 percent at 1,959.56 points, the lowest since Feb. 17. Losers outnumbered gainers 5.7 to 1. "Increased uncertainties over Chinese yuan after today's news from China prompted investors to avoid betting on riskier assets," said Park Seok-hyun, an analyst at Eugene Investment & Securities. Domestic car makers jumped on expectations for higher exports due to a weak won. Market bellwether Hyundai Motor Co Ltd rose 6.1 percent while its affiliate Kia Motors Corp jumped 6.4 percent. Shares of Ssangyong Motor Co Ltd were up 4.1 percent. The main board was pulled down by companies that rely on Chinese tourists and Chinese domestic consumption. Hotel Shilla Co Ltd lost 5.6 percent and Hanatour Service Inc fell 9.9 percent. Amorepacific Corp, a maker of cosmetic products popular with Chinese tourists, dropped 9 percent while snack maker Orion Corp slid 8.3 percent. Foreigners sold a net 63.3 billion won ($53.15 million) of KOSPI shares by midday, and were on track to be net sellers for a sixth straight session. September futures on three-year treasury bonds were up 0.11 point at 109.47.

original source: http://www.reuters.com/article/2015/08/12/markets-southkorea-idUSL3N10N1K620150812