Investment Sentiment Improves as Trump Suspends Tariffs for a Month
Heightened U.S.-China Trade Tensions Remain an Unresolved Variable
The Korean stock market closed higher on the 4th as it was relieved by U.S. President Donald Trump's tariff suspension. Foreign and institutional investors showed strong buying momentum.
On that day, the KOSPI closed at 2481.69, up 27.74 points (1.13%) from the previous day. The index opened at 2481.44, up 27.49 points (1.12%). Foreigners and institutions bought 77.2 billion KRW and 126.1 billion KRW respectively, while individuals sold stocks worth 296 billion KRW.
The strong rebound in the KOSPI was seen as fear subsided following news that the Trump administration's tariffs on Canada and Mexico would be postponed for one month, which had led to a sharp decline in the stock market the previous day.
Among the top market capitalization stocks, Hanwha Ocean (6.65%), Doosan Enerbility (4.5%), Hana Financial Group (3.71%), Hanwha Aerospace (3.57%), HD Hyundai Heavy Industries (2.89%), and KB Financial Group (2.82%) closed higher. Samsung Electronics' stock price rose more than 3% as a positive factor after Vice Chairman Lee Jae-yong was acquitted in the case of unfair merger and accounting fraud allegations the day before.
Ji-won Kim, a researcher at KB Securities, analyzed, "The domestic stock market, which had a large drop due to concerns about the tariff war since last Friday, showed a rebound centered on export stocks as it was relieved. The rebound in the U.S. manufacturing Purchasing Managers' Index (PMI) announced the day before also contributed to the market's rebound."
However, the KOSPI, which briefly rose to 2508.35 in early trading, saw its gains diminish and failed to recover the 2500 level. On the same day, President Trump’s administrative order for an additional 10% tariff on China was implemented without coordination between the two countries, and China decided to impose retaliatory tariffs of 15% on U.S. coal and liquefied natural gas (LNG), and 10% on crude oil and agricultural machinery, which was interpreted as a burden on the market. Among individual stocks, POSCO Holdings (-4.83%), LG Chem (-4.05%), POSCO International (-3.38%), POSCO Future M (-3.1%), and SKC (-2.72%) declined.
On the same day, the KOSDAQ started brightly, rising 9.75 points (1.39%) and continued the momentum to close at 719.92, up 16.12 points (2.29%). Foreigners and institutions bought 373.6 billion KRW and 47.9 billion KRW respectively, while individuals sold 410 billion KRW net.
Among the top market capitalization stocks, Rainbow Robotics (9.85%), Alteogen (6.1%), Shinsung Delta Tech (5.79%), JYP Ent. (5.47%), Rigachem Bio (5.25%), and EcoPro (3.67%) rose. On the other hand, Lino Industrial (-2.88%), Samchundang Pharm (-2.81%), Techwing (-1.56%), and Park Systems (-1.53%) fell.
Researcher Kim said, "While Trump's tariff policy and the DeepSeek issue act as uncertainty factors across the market, this week many corporate earnings reports, the Bank of England (BOE) monetary policy meeting, and U.S. employment data are pending. Although the market has rebounded, there is a possibility of increased volatility depending on the U.S.-China conflict situation, so a calm response is necessary."
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