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Seoul stocks likely to remain subdued on American-Sino trade war

All News 10:00 June 01, 2019

SEOUL, June 1 (Yonhap) -- South Korean shares are likely to stay subdued next week amid an escalating trade spat between the United States and China, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 2,041.74 points on Friday, down 0.17 percent from a week ago.

Seoul shares started lower this week following reports that China is gearing up to use its dominance of rare earth minerals as a counter in its tit-for-tat trade war with the U.S. On Wednesday, the KOSPI dropped more than 1 percent, though it rebounded slightly the following day on bargain hunting.

Analysts said the trade dispute between the world's two largest economies will put the local stock market under further selling pressure as China's tariffs on $60 billion in U.S. goods will take effect this month, with the U.S. considering imposition of higher duties on an additional US$300 billion worth of Chinese products.

"Concerns are mounting over China's retaliatory measures," Kim Byong-yeon, a researcher at NH Investment & Securities Co., said. "Until the G-20 summit late this month, investors have to live with hopes and fears regarding the U.S.-China trade deal."

Investors will also keep a close eye on trade data to be released next week. The Seoul government already hinted that the country's May export data may not be good due to global economy slowdown and a drop in semiconductor prices.

Foreigners sold more than a net 1 trillion won (US$839 million) on the Seoul bourse this week, while retail investors bought a net 201 billion won. Institutions scooped up a net 856 billion won.

Pharmaceuticals, steelmakers and construction companies were among major gainers this week, while tech, insurance and financial firms lost ground.


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