Seoul: Shares end nearly 2% higher on US-China tariff optimism

SOUTH Korean shares closed 1.8 per cent higher on Tuesday (Jul 5), after 4 straight sessions of losses, on hopes that the United States will ease some Chinese tariffs.

But, the South Korean won weakened, while the benchmark bond yield dropped amid the country’s inflation hitting a 24-year high.

The benchmark Kospi ended up 41.44 points at 2,341.78, after touching its lowest since early-November 2020 in the previous session.

China’s commerce ministry said Vice-Premier Liu He had a “constructive” exchange via a video call with US Treasury Secretary Janet Yellen on Tuesday.

Hopes increased even more for Biden administration’s easing of Chinese tariffs after the talk, said Daishin Securities’ analyst Lee Kyoung-min.

South Korea’s inflation last month hit the highest since the Asian financial crisis more than 2 decades ago, adding to signs of building strains on the open, trade-dependent economy and fanning expectations of a big rate hike by the central bank.

Among heavyweights, technology giant Samsung Electronics rose 0.2 per cent and peer SK Hynix jumped 3.8 per cent, while battery maker LG Energy Solution gained 1.5 per cent.

Covid-19 vaccine maker SK Bioscience soared 24.9 per cent as the country’s daily infections jumped to the highest since late-May, fanning expectations of additional booster shots.

Foreigners were net buyers of 135.4 billion won (S$145.1 million) worth of shares on the main board, snapping a 5-session selling streak.

SEE ALSO

Asia: Markets rise on talk Biden to roll back some China tariffs

The won was last quoted at 1,300.3 per dollar on the onshore settlement platform, down 0.25 per cent.

In offshore trading, the won was quoted down 0.3 per cent, while in non-deliverable forward trading its 1-month contract was quoted at 1,299.5.

In money and debt markets, September futures on 3-year treasury bonds rose 0.38 point to 104.34 in late afternoon trade.

The most liquid 3-year Korean treasury bond yield fell by 12.6 basis points to 3.319 per cent, while the benchmark 10-year yield dropped by 11.9 basis points to 3.380 per cent. REUTERS