BUSINESS

Seoul shares to come under pressure from trade woes

By Yonhap
  • Published : Sept 8, 2018 - 10:47
  • Updated : Sept 8, 2018 - 10:53

South Korean stocks will move within a tight range as investors may remain skittish over the escalating trade tension between the United States and China and rising odds of a Federal Reserve rate hike in September, analysts said Saturday.

    The benchmark Korea Composite Stock Price Index (KOSPI) finished at 2,281.58 on Friday, down 1.77 percent from a week ago.

 

(Yonhap)

    The index fell every session except Tuesday on concerns of trade disputes that caused investors to become more risk averse.

 Washington and Beijing have been threatening each other with further tariffs.

    Tech shares, including Samsung Electronics and SK hynix, suffered heavy losses after market watchers raised the prospect of slowing growth in the memory chip market following a two-year supercycle. 

    Autos and logistics stocks were among the top gainers of the week, while tech and steel shares were bottom.

    Market analysts said the index may drift with no upward momentum as US President Donald Trump ratchets up pressure on China, Canada and other trade partners to rally support from his core base ahead the midterm elections in November. 

    "Risks surrounding the trade dispute between the G2 continue to have no end in sight at the moment, and it is likely that the US Fed will raise interest rates in September," Kim Yong-gu, an analyst at Hana Daewoo Securities, said. "The quarterly simultaneous expiration of futures and options could also provide some volatility in the market."

    Investors will keep an eye on Atlanta Federal Reserve Bank President Raphael Bostic's speech on Monday to get clues about the forthcoming Fed rate decision.

    South Korea will announce its monthly unemployment rate on Wednesday, and various futures and options on the local market will expire simultaneously on Thursday.

    The European Central Bank and the Bank of England will separately hold rate-setting meetings on Thursday.  (Yonhap)



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