S.Korea shares slip as U.S. bond yields offset vaccine optimism

March 31, 2021

* KOSPI falls, foreigners net sellers

* Korean won strengthens against U.S. dollar

* South Korea benchmark bond yield rises

* For the midday report, please click

SEOUL, March 31 (Reuters) – Round-up of South Korean financial markets:

** South Korean shares ended lower on Wednesday, as worries over rising U.S. Treasury yields outweighed upbeat Chinese PMI data and hopes of vaccine- and stimulus-led recovery. The Korean won and the benchmark bond yield strengthened.

** The KOSPI closed down 8.58 points, or 0.28%, at 3,061.42, after gaining as much as 0.78% in early trade.

** For the month, the index gained 1.61%, extending the buying spree to a fifth straight month.

** Chip giants Samsung Electronics and SK Hynix slipped 0.97% and 1.49%, respectively, while battery maker LG Chem ended 0.37% lower.

** The 10-year Treasury yields rose as high as 1.746% on Wednesday from 1.708% in the previous session. U.S. Treasury yields skyrocketed 83 basis points just this quarter, the biggest increase in over a decade.

** That dented sentiment even as China’s manufacturing activity expanded at the fastest pace in three months, underpinning signs of a solid economic recovery.

** Back home, factory output in February grew at its fastest pace in eight months, mostly due to a boost in semiconductor and chemicals production.

** Meanwhile, U.S. President Joe Biden is set to outline later on Wednesday how he intends to pay for a $3-$4 trillion infrastructure plan.

** Foreigners were net sellers of 296.7 billion won ($262.30 million) worth of shares on the main board.

** The won ended at 1,131.8 per dollar on the onshore settlement platform, 0.16% higher than its previous close at 1,133.6.

** It edged 0.73% lower on a monthly basis, extending losses to a third straight month.

** In offshore trading, the won was quoted at 1,131.6 per dollar, up 0.1% from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,131.4.

** The benchmark 10-year yield rose by 0.6 basis points to 2.069%.

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