South Korean Markets Await Tariff Talks

South Korean equities experienced minimal movement on Monday as investors are keenly awaiting upcoming tariff discussions with the United States slated for later in the week. The KOSPI benchmark index registered a slight decrease, influenced by anticipation surrounding the trade negotiations.

As of 0451 GMT, the KOSPI edged down by 0.33 points, a marginal 0.03% decrease, settling at 2,482.65. Earlier in the session, it had seen gains of up to 0.6%.

South Korea’s acting President, Han Duck-soo, conveyed optimism regarding the forthcoming trade discussions with the U.S. in Washington. He anticipates these talks will mark the inception of substantial collaboration, while also acknowledging potential complexities in the negotiation process.

Lee Jae-myung, a prominent presidential candidate in South Korea, has pledged to reinstate legislation aimed at curbing excesses by controlling shareholders. This initiative is part of a broader strategy to stimulate the stock market and address the ‘Korea Discount,’ which refers to the tendency for local valuations to be lower relative to global counterparts.

Examining key players within the index, chip manufacturer Samsung Electronics saw a rise of 0.18%, and its competitor SK Hynix increased by 0.97%. Conversely, battery producer LG Energy Solution experienced a downturn of 1.04%.

In the automotive sector, Hyundai Motor showed a slight gain of 0.05%, while its affiliate Kia Corp advanced by 0.80%. Among internet firms, search engine Naver was up by 0.27%, but instant messaging service Kakao declined by 0.51%.

Market breadth indicated that 419 stocks advanced, while 462 stocks declined out of a total of 934 issues traded.

Foreign investors were net sellers, offloading shares worth 272.9 billion won (equivalent to $192.4 million).

The Korean won strengthened, trading 0.38% higher at 1,418.2 per dollar on the local settlement platform.

Turning to the debt market, June futures for three-year treasury bonds increased by 0.05 points to reach 107.66.

The yield on the most actively traded three-year Korean treasury bond decreased by 3.5 basis points (bps) to 2.330%, while the yield on the benchmark 10-year bond fell by 1.2 bps to 2.611%.