Market focus shifts to fundamentals as uncertainties ease after Korea-US summit
An electronic signboard at Hana Bank’s dealing room in Seoul shows the benchmark KOSPI closed at 3,179.36, down 30.50 points, or 0.95 percent, Tuesday. Yonhap
The first summit between President Lee Jae Myung and U.S. President Donald Trump helped ease tensions and uncertainties in the domestic financial market, paving the way for investors to shift their attention to fundamentals such as corporate earnings, market analysts said Tuesday.
Park Sang-hyun, an analyst at iM Securities, described the talks as “a partially successful defensive summit,” noting that Korea’s approach focused more on safeguarding interests than on extracting concessions from the U.S.
“No contentious issues were raised regarding trade or economic cooperation, and President Trump did not put forward new demands,” Park said. “Potentially sensitive topics, such as alliance modernization and defense cost-sharing, were also largely absent from the press conference, which was another positive sign.”
The domestic financial market had been somewhat unsettled this month due to the Korea-U.S. tariff talks and the summit. With both matters concluding without major surprises, much of the uncertainty has now been resolved, Park said, adding that market attention is increasingly likely to turn toward fundamentals rather than external risks.
“Until the Federal Open Market Committee meeting in September, investors will primarily focus on the Fed’s decisions regarding interest rate cuts and their scale,” he said. “Although the Korean stock market has been trading in a narrow range since the start of the month, the easing of external uncertainties and gradual improvement in domestic fundamentals suggest that a potential U.S. rate cut could serve as a catalyst for further gains in the local market.”
President Lee Jae Myung speaks with U.S. President Donald Trump following their summit at the Oval Office in the White House, Washington, D.C., Monday. Joint Press Corps
Just hours before the two leaders’ first in-person meeting at the White House, President Trump stirred tensions with a surprise post on his social media account, saying, “WHAT IS GOING ON IN SOUTH KOREA? Seems like a Purge or Revolution. We can’t have that and do business there. I am seeing the new President today at the White House.”
However, Trump shifted his stance at the meeting itself, stressing that it was a “misunderstanding,” and the two leaders held their talks in a friendly, cordial atmosphere.
Jo Yeon-joo and Na Jeong-hwan, analysts at NH Investment & Securities, noted that the meeting concluded “more positively than initially feared.”
They added, however, that while the talks helped ease uncertainties over diplomatic tensions with the U.S., it remains to be seen whether Korea’s 15 percent blanket tariff rate and its pledged $350 billion investment in the U.S. could be modified.
Analysts also suggested that investors should monitor sectors likely to benefit from expanded Korea-U.S. industrial collaboration following the summit.
“Shipbuilding and energy are expected to attract renewed interest, and North Korea-related matters could also gain prominence,” Kim Dae-jun, an analyst at Korea Investment & Securities, said.