U.S. President Donald Trump revived the tariff pressure card against the European Union (EU) last week, but on the 26th, domestic stock markets experienced positive momentum. The KOSPI and KOSDAQ indices recovered the 2600 and 720 levels respectively after three trading days.
On this day, the KOSPI index closed at 2644.40, up 52.31 points (2.02%) from the previous trading day. Foreigners and institutions led the upward market with net purchases of 101.9 billion won and 417 billion won respectively. Individuals who realized profits sold off a net 500.8 billion won.
At the beginning of the trading session, individuals showed a buying advantage, while foreigners and institutions displayed a selling trend. However, as individuals dumped stock, and foreigners and institutions collected quantities, the index's increase intensified. Foreigners shifted to net purchases after focusing on futures for the first time in three trading days. Institutions significantly increased their buying scale just before the market closed, pushing the index increase to the 2% range.
Despite the resurgence of tariff concerns, stock price movements that day were influenced by individual stock issues. Hyundai Rotem showed an increase of 8.93% amid expectations of strong performance, despite the delay in the second export contract for K2 tanks to Poland. In the construction and nuclear power themes, Hyundai E&C rose 7.38%, and the Korea Gas Corporation increased by 7.05% due to the global restoration trend in nuclear power and stabilization of the exchange rate.
Jo Min-kyu, a researcher at Shinhan Investment Corp., analyzed, "The KOSPI index displayed selective stock price movements based on individual issues, with construction, finance, and industrial materials showing strength, while food, beverages, pharmaceuticals, and clothing showed weakness."
The KOSDAQ index closed at 725.27, up 9.29 points (1.30%) from the previous trading day. In the KOSDAQ market, individuals sold off a net 164.4 billion won, while foreigners and institutions bought 83.9 billion won and 86.2 billion won respectively.
Particularly, the decline in interest rates and positive factors related to secondary batteries drew attention. Pharmaceutical and biotech stocks also showed strength. As the novel coronavirus infection (COVID-19) resurged, particularly in the Greater China region, it spread to Asian countries including Thailand, strengthening theme stocks. Secondary battery-related stocks, which had been sluggish, showed strength while avoiding the early abolition of the Advanced Manufacturing Production Tax Credit (AMPC).
Experts noted that the tariff issue, which had been quiet for a while, is rising again. Lim Jeong-eun, a researcher at KB Securities, said, "As tariff threats resurface, concerns about global trade disputes have revived," and added, "The lack of additional achievements in tariff negotiations, except for the United Kingdom and China, is also a factor heightening tensions."
On this day, President Trump brought up the 50% tariff that he warned would be imposed on the European Union (EU) starting next month. Trump said, "We must impose a 50% tariff on the EU starting June 1" and stated, "It is time to play the game my way from now on." Afterward, he reiterated that the imposition of the 50% tariff on the EU would be deferred until July 9, alleviating some market anxieties.
Trump's remarks appear to be an attempt to use tariffs again as a weapon in the tariff negotiations with EU countries, after no results were achieved. U.S. Treasury Secretary Scott Morrison also acknowledged that the tariff statement is essentially a means of pressuring the EU. On the 23rd, Morrison said regarding Trump's 50% tariff statement on Fox News, "I hope this will ignite a fire for the EU side."