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Stocks higher on China-U.S. trade war respite

Aug 15,2019
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Stocks closed higher Wednesday on eased trade tension between the United States and China. The won surged against the dollar amid a return of risk-on sentiment.

The benchmark Kospi rose 12.54 points, or 0.65 percent, to close at 1,938.37. Trading volume was moderate at 687 million shares worth 4.92 trillion won ($4 billion), with gainers outnumbering losers 510 to 316.

The main index rose to as high as 1952.22 points at one point on news that Washington decided to delay tariffs on some Beijing imports, but investors went on to lock in recent gains as China’s July industrial output missed market expectations.

“As China has agreed to restart trade talks with the United States within two weeks, the United States decided to delay imposing tariffs on some Chinese goods,” said Seo Sang-young, an analyst at Kiwoom Securities.

“However, the Kospi couldn’t get a further push as China delivered weaker-than-expected industrial output data.”

On Tuesday, the United States announced that it would delay imposing tariffs on some imported Chinese goods that were set to go into effect next month. Washington said tariffs on various consumer electronics, video game consoles and certain items of footwear will be delayed until December.

In Seoul, retail investors bought a net 51.9 billion won worth of shares, while institutions dumped a net 24.4 billion won. Foreigners off-loaded a net 50.1 billion won.

Most large-cap stocks gained ground across the board, led by tech.

Samsung Electronics rose 1.63 percent to 43,700 won, while No. 2 chipmaker SK Hynix surged 3.22 percent to 76,900 won. LG Electronics inched up 0.5 percent to 60,100 won.

Auto shares were mixed. Hyundai Motor slid 1.16 percent to 127,500 won, but Hyundai Mobis jumped 2.13 percent to 240,000 won. Kia Motors lost 0.23 percent to 43,650 won.

Posco, Korea’s top steelmaker, inched up 0.24 percent to 206,000 won and LG Chem, the nation’s top chemical company, soared 4.69 percent to 323,500 won.

Kakao declined 0.76 percent to 130,500 won.

The secondary Kosdaq added 6.40 points, or 1.08 percent.

The local currency closed at 1,212.7 against the dollar, down 9.5 won from the previous session’s close.

Bond prices, which move inversely to yields, ended mixed. The yield on three-year bonds fell 0.1 basis points to 1.149 percent, but the yield on 10-year bonds added 0.2 basis points to 1.231 percent.

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