South Korean shares were little changed in early on Monday as investors cautiously followed talks over a bilateral trade pact between Washington and Seoul and the thorny subject of automobiles and steel. Markets were also reluctant to make any major investments ahead of looming second-quarter corporate earnings guidance, starting with tech giant Samsung Electronics on July 7. That explains why investors looked past data over the weekend showing double-digit export growth for June, with the Korea Composite Stock Price Index (KOSPI) almost flat at 2,392.39 points as of 0158 GMT.
South Korean auto shares were mixed after falling at the start of trade. Hyundai Motor was up 0.3 percent and Kia Motors down 1.3 percent. Steel shares appeared to shrug off the tricky issue around the metal in U.S.-South Korea trade talks, with Posco up 1.6 percent. “Stocks seem to be digesting many events that occurred over the weekend ahead of attempting to move above the 2,400 level as corporate earnings guidance releases loom,” said Kim Ye-eun, a stock analyst at Cape Investment & Securities.
At the start of Friday’s trade talks between Seoul and Washington, U.S. Commerce Secretary Wilbur Ross said the largest component of the deficit was automotive trade and that many non-tariff barriers to U.S. auto exports to South Korea remained. Kim said global data and Samsung Electronics’ guidance will likely be major catalysts for the KOSPI this week.
Offshore investors were set to be small net buyers of KOSPI shares near mid-session. Decliners outnumbered advancers 419 to 363. The South Korean won also held steady at 1,144.5 against the dollar, little changed from Friday’s close of 1,144.1. September futures on three-year treasury bonds shed 0.02 point to 109.28.