BUSINESS

Despite jitters, bourse closes higher as China-US trade talks extend

By Jung Min-kyung
  • Published : May 10, 2019 - 17:14
  • Updated : May 10, 2019 - 17:14

South Korean stock markets rebounded at Friday’s close, after the main bourse fell below 2,100 earlier in the day, reflecting market fluctuations caused by ups and downs in the trade confrontation between the US and China. Tension had peaked at midday, as US tariff hikes on $200 billion of Chinese imports going from 10 percent to 25 percent took effect in the midst of negotiations.

The higher close, however, also showed the market stabilizing for the time being, as the two sides are expected to continue trade talks. 

(Yonhap)

The nation’s main bourse Kospi closed 0.29 percent, or 6.03 points, higher from the previous day’s trading at 2,108.04, ending a four-day losing streak and rebounding after it had fallen below 2,100 earlier in the day. It was the first time the key price index had fallen below that level in four months.

The tech-heavy Kosdaq ended 0.22 percent, or 1.6 points, lower from the previous close.

Overseas investors net sold Kospi shares of 323.1 billion won ($274.4 million) throughout the trading day, while individual investors bought a net 309.3 billion won in shares. Institutional investors also purchased a net 2.2 billion won.

The volatility in the market comes as the nation’s central bank held an emergency meeting in the morning to assess the impact of the ongoing US-China trade tensions, alongside North Korea’s recent projectile launches, on the local markets.

Bank of Korea Gov. Lee Ju-yeol noted that major financial markets have been affected by uncertainties that have grown on the trade talks as US President Donald Trump raised tariffs on Chinese goods. The increased tension was unexpected for the market, as the US administration had been hinting until last week that the talks were making steady progress.

The latest effectuation of the higher tariff, however, does not apply to Chinese goods shipped before Friday, and it would give negotiators a few more days considering that shipments by sea take about three weeks.

The two countries have been locking horns over US allegations that China steals technology.

The Korean won traded at 1,177.00 won against the US greenback, up 2.8 won from the previous session.

By Jung Min-kyung (mkjung@heraldcorp.com)


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