South Korean equities and currency were aided Wednesday by expectations of eased tensions between the United States and China after Washington decided to hold off additional tariff attack versus Chinese imports until December.
The country’s main bourse Kospi started Wednesday 1.06 percent higher and the junior Kosdaq up 1.63 percent up. The Korean won opened at 1,207 against the U.S dollar, up 15.2 from previous session’s close and also the highest since Aug. 2.
The fragile Korean financial markets further lost ground this month after the two largest economies resumed trade showdown and expanded tensions to the currency front.
Kospi dipped below the psychologically-important 2,000-mark on Aug. 2 for the first time since Jan. 4, and the Kosdaq below the 600 level for the first time in 29 months.
The local currency passed below the 1,200 won mark against the greenback earlier this month and hit three-year lows against the Japanese yen as Korea entered its own tit-for-tat trade war with Japan.
But the U.S. government on Tuesday (local time) announced that it would delay imposing 10 percent tariffs on $300 billion worth of China-made consumer goods until Dec. 15 from the initially planned date of Sept. 1.
The announcement was made after a phone call between US Trade Representative Robert Lighthizer and top Chinese negotiator Liu He on the day. U.S. President Donald Trump said the move was to help Christmas shopping.
Korean job statistics also improved in July, giving another boost to the local financial market. The labor ministry announced on Wednesday that the country added 299,000 new jobs in July, the highest in 18 months. The Korean job market has been on a steady gain since February this year, helped by the government’s heavy spending to create public sector jobs.
Separately, Hong Nam-ki, Korea’s deputy prime minister and finance minister, announced the government will execute 16.5 trillion won ($13.6 billion) worth of social overhead capital projects by the end of this to further lift up the expectations for construction business.
The Kospi closed Wednesday 0.65 percent higher at 1,938.37 and the Kosdaq up 1.08 percent at 597.15. The won ended at 1,212.7 against the dollar, up 9.5 won.
By Jung Hee-young and Cho Jeehyun
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]