Seoul: Stocks, won edge higher; US tariffs kick in

[SEOUL] South Korea's Kospi stock index and the won gained on Friday after Washington imposed tariffs on more than 800 goods from China worth US$34 billion, a decision investors fear could stoke a full-scale trade war. Bond yields rose.

Tensions between the United States and China escalated as China's commerce ministry said on Friday that China has no choice but to fight back against US trade bullying, after the Trump administration carried out its tariff policy on China.

At 0630 GMT, the Kospi ended up 15.32 points or 0.68 per cent at 2,272.87. The benchmark stock index fell 2.3 per cent on a weekly basis, marking the biggest weekly loss since March. Samsung Electronics ended 2.3 per cent lower after the tech giant said its April-June profit was likely 14.8 trillion won, below the 14.9 trillion won average of 18 analysts' estimates in a Thomson Reuters poll. Revenue likely fell 4.9 per cent from a year earlier to 58 trillion won, dampening investor sentiment.

Meanwhile, shares of South Korean smartphone components suppliers leaped on expectations ahead of Apple's new iPhone release scheduled in September. Domestic suppliers for Apple include battery maker Samsung SDI, multi-layer ceramic capacitor (MLCC) supplier Samsung Electro-Mechanics and camera module manufacturer LG Innotek jumped 7.4 per cent, 3.9 per cent and 7.2 per cent, respectively.

Despite worries over US-China trade war, shares of nation's carmakers closed higher to its previous session as the investors sought optimistic outlook that the United States and the EU may agree to withdraw auto tariffs. Hyundai Motor, South Korea's biggest carmaker, gained as much as 3.7 per cent, which led the company to step up as the country's fourth largest company by market capitalisation, according to Korea Stock Exchange Index Kospi data. Key affiliates of Hyundai Motor Group including Kia Motors and Hyundai Mobis also gained 4.6 per cent and 2.8 per cent, respectively.

The won was quoted at 1,115.9 per dollar on the onshore settlement platform, 0.24 per cent firmer than its previous close at 1,118.6. For the week, the currency gained 0.1 per cent, marking fifth winning streak of weekly gain.

In offshore trading, the won was quoted at 1,114.39 per US dollar, up 0.35 per cent from the previous session, while in one-year non-deliverable forwards it was being asked at 1,098.75 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.57 per cent, after US stocks ended the previous session with mild gains. Japanese stocks rose 1.12 per cent. The Kospi is down around 8.5 per cent so far this year, and down by 8.44 per cent in the previous 30 days.

The current price-to-earnings ratio is 12.10, the dividend yield is 1.28 per cent and the market capitalisation is 1,242.04 trillion won.

The trading volume during the session on the Kospi index was 340,894,000 shares and, of the total traded issues of 885, the number of advancing shares was 659. Foreigners were net sellers of 381,972 million won worth of shares. The US dollar has risen 4.5 per cent against the won this year. The won's high for the year is 1,053.55 per dollar on April 2, 2018, and low is 1,125.17 on June 27, 2018.

In money and debt markets, September futures on three-year treasury bonds fell 0.06 points to 108.11. The South Korean three-month Certificate of Deposit benchmark rate was quoted at 1.65 per cent, while the benchmark three-year Korean treasury bond yielded 2.115 per cent, higher than the previous day's 2.10 per cent.

REUTERS