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S. Korean stocks rebound amid intensified US-China trade dispute

(Yonhap)

Pan Pacific Agency | COMMUICATION AGENCY FOR PACIFICA REGIONS

SEOUL, May 14, 2019, The Korea Herald. South Korean stock markets rebounded slightly Tuesday after getting off to a weak start, amid signs of escalating tensions between the US and China in a trade war, reported The Korea Herald.

The nation’s main bourse Kospi closed 0.14 percent higher than the previous trading, at 2,081.84. It had recovered on the back of institutional buying after opening 0.9 percent lower than the previous close at 2060.24

The secondary tech-heavy Kosdaq ended 0.19 percent higher at 710.16, having gained throughout the day after opening 1.4 percent lower than the previous close at 698.86.

Foreigners net sold 124.4 billion won ($104.93 million) worth of shares on the main bourse.

The markets were affected by dampened investor sentiment, as fresh US-China tariff war volleys pressured both the US and Asian markets.

China announced Monday that it will raise tariffs on $60 billion worth of US goods, beginning June 1, a week after US President Donald Trump raised duties on $200 billion of Chinese goods to 25 percent from 10 percent.

The news weighed down the US stock market, as the Dow Jones Industrial Average fell 2.38 percent to 25,324.99, the S&P 500 lost 2.41 percent to 2,811.87 and the Nasdaq Composite dropped 3.41 percent to 7,647.02.

“The US-China trade talks, which were expected to wrap up by the end of May, has entered yet another stage of uncertainty,” said Lee Ye-shin, an analyst at Shinhan Investment.

“This resulted in dampened investor sentiment and a need for alertness in possible expansion of market volatility,” she added.

Meanwhile, the nation’s main bourse operator, the Korea Exchange, held an emergency meeting early in the day to deal with the possibility of a dramatic increase in market volatility, as the global stock market continues to be rattled by escalating US-China trade war tensions.

It vowed to launch a task force once it detects expansion of a negative market sentiment and to cooperate with financial authorities in creating a stable environment.

However, experts say stocks are unlikely to plummet below the psychologically important 2,000-point level, with hopes that the upcoming talks between Trump and his Chinese counterpart Xi Jinping at next month’s G-20 summit will resolve trade tensions.

“The tension was expected after the tariff war between the two nations, and it is too early to say that the deal will further sour,” said Cho Yeon-ju, an analyst at NH Investment & Securities.

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