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Kospi dips as U.S. tariffs on major trade partners take effect

Published: 04 Mar. 2025, 16:21

KIM JU-YEON
[email protected]

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,528.92 points on March 4, down 3.86 points, or 0.15 percent, from the previous trading session. [YONHAP]

Shares fell for the third consecutive session Tuesday as U.S. President Donald Trump's sweeping tariff scheme stoked fears of a global trade war. The local currency rose in value against the dollar.

The Kospi shed 3.86 points, or 0.15 percent, to close at 2,528.92.

Trade volume was moderate at 475.57 million shares worth 12.84 trillion won ($8.78 billion), with losers outnumbering winners 590 to 310.

The index opened slightly higher despite U.S. losses, but moved within a tight range and drifted lower.

Institutional and offshore investors sold a net 147.22 billion won and 196.61 billion won worth of local shares, respectively, while retail investors bought a net 206.31 billion won.

Trump's long-threatened sweeping tariffs on goods from Mexico, Canada and China came into effect as planned on Tuesday.

In response, China vowed to slap 10 to 15 percent tariffs on some U.S. imports and implemented export restrictions. Canada has also vowed retaliatory measures.

"The tariff issue is expected to cause greater volatility, though any drastic market plunge seems unlikely," Han Ji-young, a researcher from Kiwoom Securities, said.

Investors also remained wary of weak economic growth momentum, as government data showed that Korea's industrial production, retail sales and facility investment all went down from a month earlier in January.

Top-cap shares traded mixed.

Samsung Electronics remained flat at 54,500 won, while chipmaker SK hynix sank 2.16 percent to 186,100 won.

Defense shares gathered ground on hopes of greater defense spending by Europe after Trump suspended military assistance to Ukraine to pressure Ukrainian President Volodymyr Zelensky to engage in negotiations to end the war with Russia.

Hanwha Aerospace shot up 18.01 percent to 701,000 won, and Hyundai Rotem surged 10.87 percent to 86,700 won.

Shipbuilders also rose on expectations of cooperation between Seoul and Washington in the industry. HD Hyundai Heavy Industries climbed 6.25 percent to 314,500 won, and Hanwha Ocean soared 14.54 percent to 85,100 won.

The local currency was quoted at 1,461.8 won against the greenback at 3:30 p.m., down 1.6 won from the previous session.

Bond prices, which move inversely to yields, ended higher. Three-year government bond yields fell 2.6 basis points to 2.541 percent, while the return on the benchmark 10-year U.S. government bonds dropped 6.1 basis points to 4.156 percent.

BY KIM JU-YEON, YONHAP [[email protected]]