Kospi up 1 percent as U.S. and China get along
Stocks ended with healthy gains on Monday, rising more than 1 percent, as investors cheered a partial trade deal between the United States and China that raised hopes of ending their long-running trade war. The Korean won rose sharply against the U.S. dollar.The Kospi rose 22.79 points, or 1.11 percent, to close at 2,067.40. Trade volume was moderate at 502 million shares worth 4.5 trillion won ($3.8 billion), with gainers outnumbering losers 668 to 159.
After two days of trade talks in Washington last week, U.S. President Donald Trump said the United States and China reached the first phase of a deal and Beijing halted a threatened tariff hike.
The partial deal, although it lacks many details, was seen as the most important step between the world’s two largest economies that could end their trade conflict, which has threatened to slow global economic growth.
Seo Sang-young, a researcher at Kiwoom Securities, said the U.S.-China trade deal is expected to have a positive impact on the local stock market because the Korean currency’s strength could renew foreign investors’ appetite for local stocks.
“The local stock market is likely to be firm on the back of the trade deal,” Seo said.
But some analysts took a different tone about the outcome of the U.S.-China trade talks, citing a lack of a written agreement.
Lee Kyung-min, an analyst at Daishin Securities, said, “It is difficult for me to agree on whether the outcome of the trade talks is a small deal.”
Samsung Electronics rose 1.73 percent to end at 50,000 won, and SK Hynix, a global chipmaker, climbed 0.62 percent to 80,500 won.
Naver, the operator of the country’s internet portal, remained flat at 156,000 won.
Automakers traded in negative terrain, with Hyundai Motor down 3.17 percent to 122,000 won and its smaller affiliate Kia Motors dipping 2.74 percent to 40,800 won, as they have to cover a U.S. class action lawsuit over engine-related issues.
The secondary Kosdaq gained 8.51 points, or 1.34 percent, to close at 641.46.
The local currency closed at 1,184.90 won against the dollar, down 3.9 won from the previous session’s close.
Bond prices were mixed. The yield on three-year bonds fell 3.9 basis points to 1.281 percent, and the yield on 10-year bonds gained 5.9 basis points to 1.73 percent.
BY KIM BYUNG-WOOK, YONHAP [kim.byungwook@joongang.co.kr]
with the Korea JoongAng Daily
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