* KOSPI index closes down 2.57 pct, foreigners sell
* Korean won weakens versus U.S. dollar
* South Korea bond yields down
* For the midday report, please click
SEOUL, Oct 23 (Reuters) - South Korean stocks tumbled more than 2 percent on Tuesday, hitting their lowest in almost 20 months, as intensifying Sino-U.S. trade frictions and various geopolitical tensions soured sentiment across Asia.
The benchmark KOSPI index closed 2.57 percent, or 55.61 points, lower at 2,106.10, hitting the lowest since early March last year.
The main index fell at the sharpest rate since Oct. 11, when it tumbled 4.44 percent tracking rout of Wall Street.
“Rising geopolitical risks following U.S. President Donald Trump’s nuclear arsenal comment dampened investor sentiment,” said Kim Ji-hyung, an analyst at Hangyang Securities.
Trump said Washington would increase its nuclear arsenal to pressure China and Russia, which means the U.S. may pull out of Intermediate-Range Nuclear Forces Treaty.
South Korean shares are particularly sensitive to geopolitical concerns given the long-running tensions with North Korea over Pyongyang’s nuclear weapons programme.
Hangyang Securities’ Kim said the latest moves in stocks lower were driven by sentiment rather than fundamentals, and based on the possibility of a prolonged trade war between the United States and China.
Most KOSPI heavyweights closed in negative terriroty, while the country’s top two biopharma firms, Celltrion and Samsung Biologics, led the downturn.
Shares of Celltrion closed down 8.2 percent after Singapore’s Ion Investments sold part of its stake on Monday, which hit other medical shares, with medical sub-index was down 6.5 percent.
Global equities are likely to be volatile during the Wall Street’s earning season, said Seo Sang-young, an analyst at Kiwoom Securities. However, geopolitical concerns are likely to ease somewhat, he added.
“The European Union has urged dialogue between the U.S. and Russia regarding nuclear arsenal, and President Trump is unlikely to raise negative pressure on stocks market this month (ahead of midterm elections),” Seo said.
The junior KOSDAQ index plunged 3.38 percent to 719.00.
Seoul shares tracked their Asian peers with MSCI’s broadest index of Asia-Pacific shares outside Japan down 2.07 percent. Japanese stocks weakened 2.67 percent, while the Chinese benchmark index fell 2.66 percent.
On Tuesday, foreigners were net sellers of 420,962 million won ($370.19 million) worth of shares.
The won was quoted at 1,137.6 per dollar on the onshore settlement platform, 0.81 percent weaker than its previous close at 1,128.4, along with other emerging currencies.
The won’s high for the year is 1,053.55 per dollar on April 2, 2018 and its low is 1,146.26 on Oct. 11, 2018.
In money and debt markets, December futures on three-year treasury bonds rose 0.09 points to 108.56.
The Korean 3-month Certificate of Deposit benchmark rate was quoted at 1.7 percent, while the benchmark 3-year Korean treasury bond yielded 1.988 percent, lower than the previous day’s 2.01 percent. ($1 = 1,137.1500 won) (Reporting by Hayoung Choi; Editing by Sam Holmes)