Increased Bets on Trump Victory Impact South Korean Market: Stocks Down and Won Hits Two-Year Low.

Seoul: The South Korean won dipped to a two-year low against the U.S. dollar Wednesday as increased bets on Republican nominee Donald Trump's victory in the U.S. presidential election influenced investor behavior. Korean stocks ended lower for the second consecutive day.According to Yonhap News Agency, the local currency was trading at 1,396.2 won against the greenback at 3:30 p.m., down 17.6 won from the previous session. This marked the lowest level since November 7, 2022, when the rate closed at 1,401.20. Investors have been rushing to buy U.S. dollars, driven by expectations of increased fiscal spending and tax cuts under a Trump administration, which would likely increase state debt sales and market rates.Additionally, concerns over potential protectionism, particularly with China and other nations via high tariffs, are expected to boost inflation in the U.S. and increase financial market volatility. This has prompted investors to flock to safer assets like gold and dollars.The benchmark Korea Comp osite Stock Price Index (KOSPI) also dropped 13.37 points, or 0.52 percent, to close at 2,563.51. Trade volume was heavy with 538.2 million shares worth 11.6 trillion won (US$8.3 billion) exchanged, with more losers than winners at 552 to 324. The KOSPI had initially opened 0.37 percent higher but turned lower amid the increased bets on a Trump victory against Democratic nominee Kamala Harris.Lee Kyoung-min, an analyst at Daishin Securities, mentioned that the KOSPI lost ground amid investor concerns that South Korea could become a casualty in a trade conflict between the U.S. and China if Trump returns to office. Concerns have also surfaced regarding the potential loss of benefits from the U.S. Inflation Reduction Act for key industries like batteries and autos under a Trump presidency.In the tech sector, Samsung Electronics fell 0.52 percent to 57,300 won, while chipmaking rival SK hynix rose 1.35 percent to 195,800 won. Battery and auto shares faced declines due to pessimistic forecasts for the electri c vehicle sector under a second Trump term. Leading battery maker LG Energy Solution plunged 7.02 percent to 390,500 won, while rivals Samsung SDI and POSCO Future M fell 5.98 percent and 8.26 percent, respectively. Steel giant POSCO Holdings and chemical producer LG Chem also experienced declines of over 5 percent.Automaker Hyundai Motor dropped 3.95 percent to 206,500 won, and its affiliate Kia lost 2.06 percent to 95,000 won. However, financial shares saw gains, with KB Financial rising 3.3 percent to 94,000 won and Shinhan Financial up 3.32 percent to 56,000 won. Defense stocks surged, with Hanwha Aerospace, a leading defense and aerospace company, climbing 7.04 percent to 387,500 won.