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Seoul stocks set to rise on trade hopes; auto tariffs eyed: analysts

All Headlines 10:00 November 09, 2019

SEOUL, Nov. 9 (Yonhap) -- South Korean shares are expected to rise next week on lingering hopes of a partial U.S.-China trade deal, with investors eyeing a U.S. auto tariff decision, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 0.3 percent to close at 2,137.23 points on Friday, following a six-day winning streak.

For this whole week, the main index rose 1.8 percent, largely buttressed by anticipation that the two economic superpowers are nearing an interim deal to end a yearlong trade war.

Foreigners and institutions bought a combined 814 billion won (US$730 million) worth of stocks, offsetting individuals' stock selling valued at 720 billion won.

The index got a boost from new reports that the two sides have agreed to cancel tariffs on each other's goods in stages if the first phase of the trade deal is signed. But White House trade adviser Peter Navarro's denial of the reports made some investors offload stocks on Friday, analysts said.

"Navarro's comments can be interpreted this way. The U.S. and China have agreed on a plan to remove tariffs on goods in case of the signing of the 'phase one' agreement but the signing has yet to take place. So he said no decision has been made yet in terms of a trade deal," Suh Sang-young, an analyst at Kiwoom Securities Co., said.

Given this state of affairs, investors will take a wait-and-see attitude early next week but they will scoop up stocks once any schedules involving the interim deal are released, he said.

In another major event to be closely watched, the U.S. government is scheduled to decide whether to impose 25-percent tariffs on European and Asian auto imports by Nov. 13.

"As Secretary of Commerce Wilbur Ross said early this week, the U.S. had 'good conversations' with Korea and others over auto tariffs. Washington may delay plans to slap duties on Korean vehicles and parts," Mirae Asset Daewoo analyst Park Hee-chul said.

Brokerages here have forecast that any fixed schedule for the trade deal's signing and positive news on auto tariffs can push up the index to 2,170 next week.

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