South Korean stocks are expected to move in a tight range this week as investors remain wary over the US and China trade row, analysts said Sunday.
On Friday, the benchmark Korea Composite Stock Price Index (KOSPI) ended up 34.38 points, or 1.8 percent, at 1,967.79 on hopes of US-China trade talks. Last week, the KOSPI gained 1 percent.
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(Yonhap) |
Investors will remain cautious as the world's two biggest economies prepare to hold face-to-face talks in Washington this month, according to Kim Yong-gu, an analyst at Hana Financial Investment.
"The US and China delayed some planned tariffs against each other to later this year and are in the process to resume trade talks. Given this, the tit-for-tat imposition of import tariffs on each other's products may to be a tactic to increase their bargaining power in negotiations," Kim said.
The US said it will impose a 15-percent tariff on $110 billion worth of apparel, footwear and other Chinese imports Sunday (US time), with the same duty on $300 billion worth of phones, laptops and other products delayed until mid-December.
In retaliation, China said it will slap additional tariffs on $75 billion worth of oil, automobiles and other US goods, with some taking effect Sunday and the rest in mid-December.
If the both sides move to find a resolution, or at least a little progress, in their trade battle, the KOSPI will test 1,970 this week. If not, the index is expected to fall to 1,900, according to brokerages.
Investors also await the purchasing managers' index (PMI) for the manufacturing sector in the US and China for August amid a slowing global economy. (Yonhap)
