On Tuesday, South Korean financial markets faced turbulence as investor sentiment was influenced by U.S. President-elect Donald Trump’s announcement of potential tariffs on major trading partners, including Canada, Mexico, and China. The KOSPI index fell by 0.9% but pared back some losses, closing down by 0.55% or 13.98 points at 2,520.36. Analysts suggest that Trump’s tariff threats may be strategic bargaining tools rather than immediate policies.
Expectations are set for the Bank of Korea to maintain the key policy rate at 3.25% to support the Korean won, with potential rate cuts anticipated in the following year. The won remained almost unchanged against the U.S. dollar, quoted slightly higher at 1,398.2.
In the stock market, LG Energy Solution dropped by 3.2%, influenced by Tesla’s 4% overnight decline due to uncertainties regarding electric vehicle subsidies. While chipmakers, automakers, and e-commerce companies saw gains, biopharmaceutical stocks experienced a downturn. Defense stocks, including LIG Nex1 and Hanwha Aerospace, also fell significantly, partly mirroring U.S. market trends.
Foreign investors were net sellers, offloading shares worth 34.2 billion won. Meanwhile, bond markets saw declines in yields, with the three-year Korean treasury bond yield falling by 0.9 basis points to 2.770% and the benchmark 10-year yield down by 3.8 basis points to 2.901%.
Overall, 487 of the 939 traded issues advanced, while 391 declined, indicating a mixed day for the market.
Original Story https://www.livemint.com/news/world/south-korean-shares-end-lower-on-us-tariff-worries-11732605411681.html
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