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South Korea: Stocks slide to 2-month low on trade worries, weak earnings
[SEOUL] South Korean shares shed nearly 2 per cent on Monday, as tensions with Japan added more pressure on the export-dependent economy already reeling from weak global demand and the US-China tariff war.
The Seoul stock market's main KOSPI index stumbled 1.78 per cent to 2,029.40 points, closing at its lowest since late May. The junior KOSDAQ index closed down 4 per cent.
"Downside risks on the South Korean economy have grown due to Japanese export restrictions, while a big deal between the United States and China seems unlikely," said Kim Ji-hyung, an analyst at Hanyang Securities.
"Weak corporate earnings also weighed on the markets," he added.
Chipmakers Samsung Electronics fell 2.2 per cent, while SK Hynix slumped 3.5 per cent.
Japan said earlier this month it would tighten restrictions on exports of high-tech materials used for making memory chips and display panels to South Korea.
South Korea's exports are expected to contract for the eighth straight month as a trade rift with Japan drags on the economy, according to analysts polled by Reuters.
US and Chinese trade negotiators will meet in Shanghai this week for their first in-person talks since a G20 truce last month. However, expectations were low for a breakthrough with US President Donald Trump offering a pessimistic view on reaching a trade deal with China.
The trading volume during the session on the KOSPI index was 596.17 million shares and, of the total traded issues of 892, the number of advancing shares was 74.