Stocks, currency tumble on Sino-America trade woes

By Jhoo Dong-chan

Seoul financial markets tumbled Monday on growing concerns over an escalating trade war between the U.S. and China. Stocks dipped over 1.5 percent after a foreign selling spree, while the Korean won lost 7.2 won against the U.S. dollar. Fears are now mounting among investors over possibilities the benchmark KOSPI could dip below the 1,900 mark once again soon.

Experts said the recent development between the U.S. and China could further deteriorate the global uncertainties while strengthening investors' trend toward less risky assets.

According to the Korea Exchange (KRX), Monday, the KOSPI closed at 1,916.31 points on the Monday session, down 31.99 points, or 1.64 percent, from the previous session.

The secondary Kosdaq also plunged 26.07 points, or 4.28 percent, to 582.91 on the day.

The won-dollar exchange rate closed at 1,217.8 won, up from the previous session.

The nosedive in Seoul stocks came after U.S. President Donald Trump's recent remark hinting Washington would impose additional tariffs on $250 billion worth of Chinese products to 30 percent from 25 percent.

His remark was in response to Beijing's announcement of new tariffs on $75 billion worth of U.S. goods.

The United States and China are Korea's two largest trading partners.

Experts displayed their frustration about the future course of Seoul stocks.

“China has launched its retaliation against U.S. goods. The situation is likely to worsen over the renewed tension between the two giant economies,” said Daishin Securities researcher Lee Kyung-min.

“Korea's stock market should be vulnerable to such external factors considering its export dependence on the two countries. Daishin Securities previously suggested the 1,850 point mark is the lowest end in the brokerage's KOSPI outlooks, but we now need to revise the range downward under the current situation.”