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New U.S. trade deal gives Seoul stocks a boost

Mar 28,2018
Korean stocks closed higher Tuesday as investor sentiment was boosted by the successful renegotiation of the Korea-U.S. free trade agreement (FTA) and eased tensions between the United States and China over trade. The local currency appreciated against the U.S. greenback.

The benchmark Kospi gained 14.98 points, or 0.61 percent, to 2,452.06. Trade volume was moderate at 6.18 trillion won ($5.77 billion).

The main bourse rose as Korea became the first country to be indefinitely exempted from the 25 percent tariffs on steel exports by the United States. The trade minister announced Monday that a revision to the Korea-U.S. FTA had been settled, granting Washington other concessions in return for the exemption.

Seoul shares also gained ground as the world’s top two economies began talks to settle their trade dispute.

Foreigners bought a net 9.4 billion won, with institutions also becoming net buyers at 73.5 billion won. Individuals offloaded a net 85 billion won.

Large-cap shares ended mixed.

Tech shares mostly closed bearish, with market leader Samsung Electronics falling 0.6 percent to 2,499,000 won. No. 2 chipmaker SK Hynix decreased 3.1 percent to 81,400 won. LG Electronics rose 2.29 percent to 111,500 won.

Carmakers closed bullish, with Hyundai Motor increasing 3.01 percent to 154,000 won and auto parts maker Hyundai Mobis jumping 5.38 percent to 245,000 won. Kia Motors advanced 0.95 percent to 31,750 won.

Chemical shares were also among major winners, with LG Chem increasing 0.75 percent to 403,000 won and Amorepacific adding 2.7 percent to 304,500 won. LG Household & Health Care gained 2.02 percent to 1,163,000 won.

Steel and metal shares climbed 3.7 percent, buoyed by news of the tariff exemption.

The secondary Kosdaq climbed 5.15 points, or 0.60 percent, to 858.84. Positive developments regarding the U.S. trade war helped the tech-heavy market end in positive terrain as well.

By sector, food and tobacco shares rose 3.4 percent while IT shares increased 1.2 percent. Semiconductors remained unchanged.

The local currency closed at 1,070.30 won against the U.S. dollar, down 10.80 won from the previous session.

Bond prices, which move inversely to yields, ended higher. The yield on three-year bonds fell 1.2 basis points to 2.23 percent, and the return on 10-year government bonds fell 1.1 basis points to 2.68 percent.

BY KIM EUN-JIN, YONHAP [kim.eunjin1@joongang.co.kr]