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Shares rise 1 percent as U.S., China pull back tariffs

Published: 12 May. 2025, 17:41

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,607.33 points on May 12, up 30.06 points, or 1.17 percent, from the previous trading session. [NEWS1]

Shares ended more than 1 percent higher Monday as the United States and China wrapped up their first high-level tariff negotiations, boosting hopes the two countries may reach a trade deal. The won's value fell against the dollar.

The Kospi added 30.06 points, or 1.17 percent, to close at 2,607.33.

Trade volume was moderate at 406.5 million shares worth 8.45 trillion won ($6 billion), with winners outnumbering losers 659 to 240.

Institutions were the main buyers, purchasing 342.78 billion won worth of local shares, while foreigners and retail investors sold 7.5 billion won and 390 billion won, respectively.

Experts said the Kospi gained ground on hopes of a possible trade agreement between the United States and China in the near future, they expect to help ease tensions in the global trade market sparked by U.S. tariffs.

Washington and Beijing held trade dialogue in Geneva on Saturday and Sunday to discuss tariffs and other trade issues.

Both sides have yet to issue a statement on the results of the talks, but U.S. Treasury Secretary Scott Bessent said a deal had been reached with China to cut the U.S. trade deficit, touting “substantial progress.”

The Chinese delegation also said in a news conference that it had engaged in “constructive” dialogue with the United States.

Shortly after the stock market closed, Washington and Beijing issued a joint statement announcing a 90-day reduction of reciprocal tariffs to allow for further negotiations.

The United States will lower its combined 145 percent levies on most Chinese imports to 30 percent by Wednesday, and China will cut its 125 percent tariffs on U.S. goods to 10 percent, according to the statement.

In Seoul, market heavyweight Samsung Electronics soared 5.11 percent to 57,600 won on bargain hunting, and its chipmaking rival SK hynix advanced 2.58 percent to 195,000 won.

Top automaker Hyundai Motor jumped 3.11 percent to 195,800 won, and its sister, Kia, climbed 3.47 percent to 92,400 won.

Leading battery maker LG Energy Solution gained 1.1 percent to 321,500 won, and major plant constructor Doosan Enerbility surged 3.41 percent to 28,800 won.

On the other hand, the bio sector sharply fell on news that U.S. President Donald Trump plans to sign an executive order lowering prices of prescription drugs.

Samsung Biologics tumbled 4.71 percent to 991,000 won, and Celltrion slid 3.92 percent to 151,800 won.

Major shipbuilders also lost ground, with HD Hyundai Heavy Industries and Hanwha Ocean down 2.06 percent and 4.51 percent to 404,500 won and 76,200 won, respectively. HD Korea Shipbuilding & Offshore Engineering also dropped 3.7 percent to 273,000 won.

Defense giant Hanwha Aerospace shot down 6.61 percent to 820,000 won.

The local currency was quoted at 1,402.4 won against the greenback at 3:30 p.m., down 2.4 won from the previous session.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year Treasurys dropped 0.1 basis point to 2.33 percent, and the return on five-year government bonds increased 0.3 basis point to 2.45 percent.

Yonhap