Korean markets stabilize on verbal intervention amid trade tensions

2019.05.10 15:55:49 | 2019.05.10 15:56:46

[Graphics by Song Ji-yoon]이미지 확대

[Graphics by Song Ji-yoon]

Korean capital markets underwent heavy swings Friday but stabilized as authorities issued verbal intervention by vowing to do their upmost to minimize the shock from renewed trade tensions between the United States and China as two governments worked on a deal, while U.S. tariffs on $200 billion Chinese products went up to 25 percent from 10 percent as planned.

Korean stocks extended weeklong losing streak Friday, falling below 2,100 levels for the first time since Jan. 16, while the Korean won touched its lowest in more than two years. Shares recovered as Beijing officials stayed committed to senior trade talks even after the new tariff rate was imposed as planned Friday.

The main Kospi that lost 3 percent on Thursday and stayed lower until midday recovered to end Friday at 2,108.04, up 0.3 percent. The Kosdaq that fell nearly 3 percent finished 722.62, down 0.22 percent.

Foreigners net sold 322.1 billion won worth of Kospi shares, whereas retail investor snatched up 309.6 billion won.

The Korean won hit new 28-month low of 1,181.0 against the U.S. dollar in morning trade, but closed at 1,177.0, 0.2 percent higher from the previous session.

BOK Gov. Lee Ju-yeol이미지 확대

BOK Gov. Lee Ju-yeol

Government and central bank authorities held an emergency meeting to address volatilities in the market.

Deputy prime minister for economy and finance minister Hong Nam-ki ordered the government to be “fully ready to act promptly” to external shocks. Bank of Korea Governor Lee Ju-yeol also ordered central bank officials to work closely with the government after keeping close watch on the impact of the trade talks on the local market.

By Chung Seul-gi and Lee Ha-yeon

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]