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South Korea: Stocks tumble as Japan takes Seoul off easy-trade list
[SEOUL] South Korean shares slumped 1 per cent on Friday as Japan's decision to remove Seoul from fast-track export status put further strain on the trade-dependent economy, which is already reeling from the broadening fallout of the Sino-US trade war.
The Seoul stock market's main KOSPI closed down 19.21 points or 0.95 per cent at 1,998.13 points.
Japan's Cabinet approved a plan to remove the neighbouring country from a list of countries that enjoy minimum export controls, prompting a warning from South Korean President Moon Jae-in of retaliatory steps against Tokyo.
The decision would take effect from Aug 28, Japan's Industry Minister Hiroshige Seko told a briefing.
"It's hard to gauge its impact as of now. Japan may approve some exports smoothly, while making the process difficult for certain items," said Ku Yong-uk, chief of Mirae Asset Daewoo research centre.
"It will affect some small- and mid-sized manufacturers, which import precision machineries from Japan," said Seo Sang-young, an analyst at Kiwoom Securities. The benchmark index lost as much as 1.5 per cent in early trade, falling below the 2,000-point mark for the first time since Jan 4, but later recouped some of the early losses.
On a weekly basis, the KOSPI tumbled 3.3 per cent for its second straight week in the red.
Foreigners were net sellers of US$330.79 million worth of shares on the main board on the day, the most since May 28.
Sentiment was already gloomy when trading began after US President Donald Trump on Thursday said he plans to impose a 10 per cent tariff on US$300 billion of Chinese imports from next month in a sharp escalation of the year-long trade dispute, sending global stocks sliding and triggering a rush to safe-haven assets.
There was some cheer for South Korean shares seen benefiting from a boycott of Japanese goods.
Stationery-maker Monami Co Ltd surged more than 17.4 per cent, while apparel makers Shinsung Tongsang Co Ltd and Sbw Inc rallied 6.5 per cent and 4.2 per cent, respectively.