Korean stocks rose today despite another big
dip on Wall street.
The rise is partly thanks to a lower tax on
transactions that took effect today.
But there are still concerns over the U.S.-China
trade conflict... and a possible sign of recession
from the bond market.
Kim Hyesung reports.
The benchmark KOSPI rose Thursday by point-eight
percent to close at 20-38-point-eight.
This rebound comes after the KOSPI shed more
than one percent in the previous session,
bringing it to the lowest level since January.
The bounce back was led by net buying from
foreigners thanks to a lower stock transaction
tax and better performance by Korean IT companies.
But the rebound was limited as trade tensions
between the U.S.and China are showing no sign
of easing and because of concerns over global
growth.
U.S. shares fell sharply on Wednesday.
The Dow Jones Industrial Average shed more
than 2-hundred-20 points, or point-9 percent,
the S&P 500 lost point-7 percent, and the
Nasdaq point-8 percent.
This as U.S.-China trade tensions continued
to weigh on stocks after Chinese state media
suggested Beijing may slash exports of rare-earth
minerals, a key component in devices ranging
from smartphones to TVs, opening another front
in its trade war with the U.S.
"The trade conflict with Beijing could not
only hurt the Chinese economy, but also the
U.S. and the global economy, and Korea, in
particalar, affecting intermediary goods and
trade.
The Trump Administration's latest currency
tariff threat is also a huge risk factor weighing
on the global economy.
The stock market will remain volatile for
some time."
Uncertainties over U.S.-China trade tensions
and global growth led investors further into
the relative safety of government bonds, pulling
down yields.
The yield gap between the U.S. 10-year Treasury
note and the 3-month Treasury bill, often
watched as an early signal of a pending recession,
slid to a twelve-year low of minus 13 basis
points.
The U.S. dollar rose for a third day versus
its major peers, including the Japanese yen.
Gold, another investor safe haven, climbed...
and oil retreated.
Kim Hyesung, Arirang News.
