South Korean stocks weakened and the won slipped to a near one-week low early on Thursday.
South Korean stocks weakened and the won slipped to a near one-week low early on Thursday, as mounting political uncertainties over U.S. President Donald Trump’s future raised worries that investors in Asian emerging markets could move to less risky destinations. The U.S. Justice Department on Wednesday named former FBI Director Robert Mueller as special counsel to investigate possible collusion between Trump campaign and Russia in last year’s presidential election.
As the fallout spread from reports that Trump tried to interfere with a federal investigation, one of Republican lawmaker even mentioned the risk of impeachment. The won stood at 1,125.2 against the dollar as of 0218 GMT, down 0.6 percent versus Wednesday’s close of 1,118.3. The Korea Composite Stock Price Index (KOSPI) was down 0.5 percent at 2,281.94 points, and touched its weakest level since May 10 right after the market opened.
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“Though the dollar itself slid in the global market, political risks from the United States boosted risk-off sentiment in Asian markets, pressuring the won,” said Kim Doo-un, a foreign exchange analyst at Hana Financial Investment. Kim expected the volatility in the currency to calm down in coming days as the U.S. political turmoil would take time to play out. Offshore investors were set to be net sellers, offloading 46.1 billion Korean won ($40.99 million) worth of KOSPI shares near mid-session. Shares of Hyundai Motor rose over 3 percent while Kia Motors gained 2.6 percent. Decliners outnumbered advancers 584 to 211. June futures on three-year treasury bonds gained 0.05 point to 109.49.