Seoul: South Korean stocks ended more than 1 percent higher Monday as the United States and China wrapped up their first high-level tariff negotiations, boosting hopes the two countries may reach a trade deal. The local currency was weak against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) added 30.06 points, or 1.17 percent, to close at 2,607.33. Trade volume was moderate at 406.5 million shares worth 8.45 trillion won (US$6 billion), with winners outnumbering losers 659 to 240. Institutions were the main buyers, purchasing 342.78 billion won worth of local shares, while foreigners and retail investors sold 7.5 billion won and 390 billion won, respectively.
Experts indicated that the KOSPI gained ground on hopes for a possible trade agreement between the U.S. and China in the near future, which is expected to help ease tensions in the global trade market sparked by U.S. tariffs. Washington and Beijing held trade dialogue in Geneva over the weekend to discuss tariffs and other trade issues. While both sides have yet to issue an official statement on the results of the talks, U.S. Treasury Secretary Scott Bessent mentioned a deal had been reached with China to cut the U.S. trade deficit, citing "substantial progress."
The Chinese delegation also noted in a news conference that it held a "constructive" dialogue with the U.S. Shortly after the stock market closed, the U.S. and China issued a joint statement, announcing a 90-day reduction of reciprocal tariffs to allow for further negotiations. The U.S. will lower its combined 145 percent levies on most Chinese imports to 30 percent by May 14, and China will cut its 125 percent tariffs on U.S. goods to 10 percent, the statement revealed.
In Seoul, major market players experienced significant gains. Market heavyweight Samsung Electronics soared 5.11 percent to 57,600 won on bargain hunting, and its chipmaking rival SK hynix advanced 2.58 percent to 195,000 won. Top automaker Hyundai Motor jumped 3.11 percent to 195,800 won, and its sister company, Kia, climbed 3.47 percent to 92,400 won. Leading battery maker LG Energy Solution gained 1.1 percent to 321,500 won, and major plant constructor Doosan Enerbility surged 3.41 percent to 28,800 won.
Conversely, the bio sector experienced a downturn following news that U.S. President Donald Trump plans to sign an executive order lowering prices of prescription drugs. Samsung Biologics tumbled 4.71 percent to 991,000 won, and Celltrion slid 3.92 percent to 151,800 won. Major shipbuilders also lost ground, with HD Hyundai Heavy and Hanwha Ocean down 2.06 percent and 4.51 percent to 404,500 won and 76,200 won, respectively. HD Korea Shipbuilding also dropped 3.7 percent to 273,000 won, and defense giant Hanwha Aerospace fell 6.61 percent to 820,000 won.
The local currency was quoted at 1,402.4 won against the greenback at 3:30 p.m., down 2.4 won from the previous session. Bond prices closed mixed, with the yield on three-year Treasurys dropping 0.1 basis point to 2.330 percent, and the return on the benchmark five-year government bonds increasing 0.3 basis point to 2.451 percent.