Yoon pushes for Xi’s visit to firm up ties with China
Seoul prepares for first major military parade in ten years
Opposition leader Lee attends arrest warrant hearing at Seoul court
[Korea Beyond Korea] Early Koreanists 'on verge of extinction overseas'
Young swimmer enjoys self-fulfilling prophecy in gold medal-winning race
Chief justice seat at top court left vacant amid Assembly chaos
S. Korean fencer Oh Sang-uk wins gold in men's individual sabre
Is S. Korea dangerous for women?
[Herald Interview] S&P economist tells Korea to brace for worst-case scenario with China
Trilateral talks open on Korea-Japan-China meeting
Authorities to keep close tabs on widening volatility in US marketsBy Son Ji-hyoung
Published : Feb. 6, 2018 - 15:55
“We will closely watch on how the US market volatility would impact local markets,” the Bank of Korea Gov. Lee Ju-yeol told press Tuesday.
Financial Supervisory Service Gov. Choe Heung-sik also asked high-ranking officials in a meeting to brace for negative impacts, saying the constant rise in stock price and the fears of US interest rate hike have posed a downward pressure on the stock markets.
Choe also pointed to the possible re-emergence of geopolitical risk after the 2018 PyeongChang Olympics ends.
The remarks came as US stock markets have continuously reeled from hawkish signs from the US Federal Reserve. On Monday, Dow Jones Industrial on Monday sank 4.6 percent, the broad-based S&P 500 fell 4.1 percent and tech-heavy Nasdaq Composite dropped 3.8 percent.
Samsung Electronics, Kospi market bellwether, fell 1 percent, despite the release of its Vice Chairman Lee Jae-yong following a lighter sentence on charges of bribery Monday.
The recent falls in stock prices are unlikely to be an end, analysts said.
Lee Eun-taek, an analyst at KB Securities, said the stock plunge will cause another drop in the market here, while the market correction would last for about 2-3 months, citing previous cases when the US stocks fell over 6 percent in two trading days.
Another analyst, Park So-yeon of Korea Investment & Securities, recommended investors turning to other sectors than the tech sector.
“As profit estimates for the IT sector are being revised down, Korea’s stock market will likely move in a boxed range with the upper-end remaining closed for the time being,” Park wrote in a note Tuesday. “The warmth should continue to spread to cyclicals, consumer discretionary and small/mid-cap stocks,” Park wrote.
Local currency weakened against the dollar, maintaining the losing streak for four consecutive trading days. The Korean won was trading at 1,091.5 won against the greenback, up 3 won in a day, and up 23.6 won in four days.
Bond markets here slightly recovered in closing. The three-year sovereign bond yield slid 3.4 basis points Tuesday and came to 2.253 percent, while the 10-year bond yield reached 2.504 percent, down 5.4 basis points from a day prior, according to data by the Korea Financial Investment Association. The 30-year bond yield fell 4.5 basis points.
When bond yield increases, the bond price inversely falls, and vice versa, meaning Tuesday’s market showed a bullish trend.
By Son Ji-hyoung
S. Korea holds rare military parade, warns NK against nuclear attack
Is S. Korea dangerous for women?
Yoon plans state visits to UK, Netherlands later this year