The South Korean won edged down early on Tuesday in a risk-averse mood ahead of the U.S.-China summit this week, compounded by the bombing of an underground train in St Petersburg, Russia.
The South Korean won edged down early on Tuesday in a risk-averse mood ahead of the U.S.-China summit this week, compounded by the bombing of an underground train in St Petersburg, Russia. Shares of Hyundai Motor dropped 2.6 percent while Kia Motor lost nearly 1 percent on news Hyundai Motor Co and Kia Motors have slashed vehicle production in China amid diplomatic tensions and competition from local brands. Market participants were focused on the meeting between U.S. President Donald Trump and Chinese President Xi Jinping later this week. Any mention of their strategies on North Korea could affect South Korean markets. The won stood at 1,117.8 against the dollar as of 0319 GMT, down 0.2 percent versus Monday’s close of 1,115.3.
“What South Korean markets need to know from Trump and Xi’s meeting is whether they made any mention of tangible action against North Korea’s missiles,” said Paik Seokhyun, a foreign exchange analyst at Shinhan Bank. Paik said any comments that signal a hard-line policy against North Korea could raise geopolitical tension and weaken the won.
President Donald Trump held out the possibility on Sunday of using trade as a lever to secure Chinese cooperation against North Korea, and suggested Washington might deal with Pyongyang’s nuclear and missile programs on its own if need be. South Korean shares were flat, with foreign investors set to be net sellers of local stocks near mid-session, offloading 46.4 billion won ($41.50 million) worth. The Korea Composite Stock Price Index (KOSPI)was down 0.1 percent at 2,164.46 points. Decliners outnumbered advancers 513 to 256. June futures on three-year treasury bonds gained 0.09 point to 109.56.