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Kospi gets a boost as Xi eases trade war fears

Apr 11,2018
Korean stocks closed higher Tuesday after President Xi Jinping said he would further open China’s market and cut import tariffs, easing fears of a global trade war and boosting investor sentiment. The Korean won appreciated against the U.S. dollar.

The benchmark Kospi moved up 6.66 points, or 0.27 percent, to close at 2,450.74. It exceeded 2,450 points for the first time in 10 sessions. Trade volume was moderate at 7.39 trillion won ($6.92 billion).

The index started lower, dragged down by forecasts of growing U.S. budget deficits, but rebounded after the Chinese leader said Beijing will lower trade barriers and further open up its economy at the Boao Forum.

Xi’s pledge follows weeks of tit-for-tat tariffs between Beijing and Washington and warnings of more retaliatory actions that have raised concerns over a trade war.

Institutions and retail investors bought a net 111.9 billion won and 30.9 billion won worth of local stocks each, while foreigners dumped a net 119.7 billion won.

Cosmetic shares were up on hopes for improved sales in China, Korea’s biggest export market.

Top cosmetics maker Amorepacific rose 1.33 percent to 342,000 won, and LG Household & Healthcare gained 3.24 percent to 1,305,000 won.

Tech shares closed lower. Market bellwether Samsung Electronics declined 0.65 percent to 2,444,000 won, while SK Hynix, a major chipmaker, shed 0.25 percent to 80,400 won.

Biotech shares had mixed fortunes. Samsung BioLogics, Samsung’s health care unit, rose 3.74 percent to 583,000 won, and Celltrion, a major pharmaceutical firm, edged downed 0.98 percent to 303,000 won.

The secondary Kosdaq inched up 2.86 points, or 0.33 percent, to 877.30.

The tech-heavy index started lower as institutions and foreigners opted for profit-taking, but ended on positive terrain buoyed by the launch of the Kosdaq Venture Funds last week. Those who sign up for the funds and invest in new or existing shares of start-ups listed on the Kosdaq are eligible for tax and other financial benefits.

Institutions and foreigners were net sellers, offloading 6.0 billion won and 22.1 billion won each. Individuals bought a net 36.7 billion won.

The local currency traded at 1,066.4 won against the U.S. dollar, down 0.7 won from the previous session’s close.

Bond prices, which move inversely to yields, ended lower. The yield on three-year bonds increased 1.8 basis points to 2.19 percent, and the return on 10-year government bonds rose 0.9 basis points to 2.62 percent.

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