On the 2nd, a day before the 21st presidential election, KOSPI and KOSDAQ indices started slightly higher. Although there are ongoing concerns regarding U.S.-China trade negotiations, it seems the market's fears lessened as President Donald Trump and President Xi Jinping of China are reported to have a currency conversation this week.
The KOSPI index showed 2,700.22 at 9:03 a.m. on the day, gaining 2.55 points (0.09%) from the previous trading day, reclaiming the 2,700 mark. Among the top market capitalization stocks, Samsung Electronics, SK hynix, and Samsung Biologics are in an upward trend. Stocks such as KB Financial, Hyundai Motor, and Celltrion traded at lower prices than the previous day.
At the same time, the KOSDAQ index recorded a rise of 1.09 points (0.15%) to 735.44. Stocks of leading companies such as Alteogen, Ecopro, and ECOPRO BM are strong. HLB and Rainbow Robotics are in a downturn.
The U.S.-China conflict continues. President Trump claimed through social media platform Truth Social on the 30th last month that China violated the trade agreement. This is interpreted as criticism that China is not lifting the export restrictions on key minerals and rare earth elements as agreed. Conversely, China is raising issues regarding the U.S. ban on the export of key technologies such as aircraft engines, semiconductors, and specific chemicals to China.
Additionally, President Trump announced he would raise tariffs on imported steel and aluminum products from 25% to 50%. The prospect of tariff concerns resurfacing, which had been calming down, has increased significantly.
However, U.S. Treasury Secretary Scott Bessent noted in a CBS interview the previous day that "President Trump is expected to have a conversation soon with President Xi regarding trade issues," easing the likelihood of a rupture. It has become important whether U.S.-China trade negotiations can gain momentum again after the leaders' conversation.
The domestic securities market will be closed on the 3rd due to the presidential election. There are mixed expectations that political uncertainty may be resolved after the election, leading to the alleviation of the "Korea discount" (the undervaluation of Korean stocks) that the candidates agreed on, and short-term adjustment expectations due to profit-taking on policy-themed stocks.
JUNGDAWN LS Securities expressed an optimistic outlook for the Korean securities market in the second half of this year but also emphasized, "Given that the market has already reflected policy expectations, we lean towards some profit-taking activity."