Korean shares underwent a roller-coaster ride on external news after starting Tuesday lower from overnight Wall Street rout on concerns for an extended tariff war between the United States and China and later recovering upon renewed hopes for a deal when the summits meet next month during G20 meeting.

Korea’s main Kospi extended losses after slipping below the psychologically-important 2,100-mark Monday. After starting 1 percent lower, the Kospi flirted around the positive territory after midday on renewed hopes from U.S. Treasury Secretary’s comment that negotiations were still on. The Kospi closed Tuesday up 0.14 percent at 2,081.84 and the Kosdaq 0.19 percent higher at 710.16.

Foreigners led the selling spree, while local institutions defended with buying.

Panicky mood eased as the retaliatory duties from China would kick in from June and senior U.S. officials were invited back to Beijing for further talks. U.S. President Trump also said he would be meeting Chinese President Xi Jinping at G20 summit in Osaka next month.

But analysts warn of increased volatility as the trade war is unlikely to be settled any time soon with both states unwilling to give in easily.

Korea is believed to become one of the biggest victims from the head-on clash between the two largest economies, which are also Korea’s biggest trade partners with exports to the two markets making up nearly 40 percent. Trade with the two economies is equivalent to 70 percent of Korea’s gross domestic product. Korean shipments inevitably would suffer as 79 percent of its exports to China are intermediary goods that are assembled in China for exports to the U.S. and elsewhere.

The Korean currency opened Tuesday 2.5 won lower at 1,190 won against the U.S. dollar, the lowest for intraday trading since Jan. 11, 2017 when it recorded 1,202.00. It closed at 1,189.4 won, down 1.9.

By Chung Seul-gi and Cho Jeehyun

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