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South Korea: Stocks, won slide on fears of a US-China trade war
[SEOUL] South Korean shares and its won currency slumped to two- and three-week lows on Friday as the United States and China exchanged blows over import tariffs, unnerving markets with fears of a trade war.
President Donald Trump gave notice on Thursday US time that he would impose tariffs on Chinese products to protect American industries, although his actions appeared to be more of a warning shot than the start of a global trade war.
China's embassy in Washington vowed Beijing would "fight to the end" in any trade war.
""We will retaliate. If people want to play tough, we will play tough with them and see who will last longer," Ambassador Cui Tiankai said in a video posted to the embassy's Facebook page.
The Korea Composite Stock Price Index (Kospi) was down 2.2 per cent at 2,441.51 points as of 0217 GMT, its lowest intraday trading level since March 9.
The won was quoted at 1,080.3 versus dollar, 0.7 per cent lower than Thursday's close of 1,072.7. It was the weakest intraday level since March 5.
"A possible trade war between the United States and China is especially serious for the South Korean economy as it could directly or indirectly affect the country's trade with them as well," said Seo Sang Young, a stock analyst at Kiwoom Securities.
Both countries are major South Korean trade partners.
South Korea was exempted from US tariffs on its steel exports, which supported steelmaker stocks in early trade, but the shares soon pared gains as market focus moved to bigger global trade fears.
Posco fell more than 4 per cent and Seah Steel lost 2 per cent, reversing previous gains. Dongbu Steel managed to stay in positive territory, up 5.6 per cent.
Kiwoom Securities' Seo said that the market impact of Trump's trade measures would depend on Beijing's reaction in the near term, noting Trump still described China as a friend and negotiations were ongoing.
Other market heavyweights also posted losses, with Samsung Electronics and SK Hynix both down more than 3 per cent.
Offshore investors were set to be net sellers, offloading 158.6 billion Korean won worth of Kospi shares near mid-session, weighing on the index.
Declining issues far outnumbered advancing ones by 776 to 75.
June futures on three-year treasury bonds rose 0.08 point to 107.64.