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Tariff war jitters recede and Kospi reaps gains

May 16,2019
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Local shares closed higher Wednesday on eased concerns about a tariff war between the United States and China, the world’s two largest economies, which are also Korea’s largest trading partners. The won rose slightly against the dollar.

The benchmark Kospi added 10.94 points, or 0.53 percent, to close at 2,092.78. Trading volume was moderate at some 556 million shares worth 4.86 trillion won ($4.08 billion), with gainers outpacing losers 648 to 195.

The advance in Korea, as well as other major Asian markets, followed overnight gains on Wall Street, apparently prompted by remarks by U.S. President Donald Trump that a trade deal with China may still be possible.

Both the United States and China have raised their import tariffs on goods from each other after drawn out trade negotiations ended without a deal last week.

“The stock market rebounded as remarks from key negotiators about continued trade negotiations [between the United States and China], such as President Trump saying he will hold talks with Chinese President Xi Jinping at the Group of 20 summit set to be held next month, helped remove uncertainties,” said Seo Sang-young, a researcher at Kiwoom Securities.

Tokyo’s Nikkei 225 index closed 0.58 percent higher, while the Hong Kong Hang Seng index was up 1.08 percent as of 3:40 p.m. Seoul time.

In Seoul, foreigners offloaded a net 79 billion won, extending their selling streak to a fifth consecutive session. Individuals scooped up a net 108 billion won, while institutions sold a net 48 billion won.

Large caps closed mixed.

Market kingpin Samsung Electronics lost 0.23 percent, to 42,550 won, with No. 2 chipmaker SK Hynix slipping 0.13 percent, to 74,500 won.

Top carmaker Hyundai Motor was flat at 128,000 won, but its smaller affiliate Kia Motors lost 0.94 percent, to 41,950 won. Auto parts maker Hyundai Mobis inched up 0.24 percent, to 213,000 won.

Top chemicals company LG Chemical surged 2.71 percent, to 340,500 won, while top pharmaceutical firm Celltrion advanced 0.26 percent, to 196,000 won. Leading steelmaker Posco inched up 0.21 percent, to 240,000 won.

The secondary Kosdaq jumped 19.44 points, or 2.74 percent, to close at 729.60.

The won closed at 1,188.60 won against the dollar, down 0.80 won from Tuesday’s close.

Bond prices, which move inversely to yields, ended higher. The yield on three-year bonds lost 0.1 basis points to 1.710 percent, and the return on 10-year bonds fell 0.3 basis points to 1.865 percent.


BY KO JUN-TAE [ko.juntae@joongang.co.kr]