KOSPI Soars 5% on Trump’s Tariff Waiver Announcement 🚀

The KOSPI (Korea Composite Stock Price Index) experienced a significant surge today, jumping by approximately 5% following U.S. President Donald Trump’s announcement of a 90-day mutual tariff waiver for all countries except China. This news has injected considerable optimism into the South Korean stock market.

Market Overview

• At the start of trading, the KOSPI triggered a buy-sidecar.
• The Korean Won (KRW) strengthened substantially against the US dollar (USD), with the KRW/USD exchange rate falling by about 38 KRW.
• This is the largest drop since December 17, 2008, during the global financial crisis.

Detailed Market Figures

• As of 9:25 AM, the KOSPI stood at 2407.85, up 114.15 points (4.98%) from the previous day.
• Foreign investors turned net buyers, purchasing 84.9 billion KRW worth of shares in early trading, reversing a nine-day selling streak.
• Institutional investors also joined the buying spree with net purchases of 19.1 billion KRW.
• Individual investors, however, were net sellers, offloading 98.7 billion KRW.
• The KOSDAQ (Korean Securities Dealers Automated Quotations) also saw gains, rising by 27.45 points (4.27%) to reach 670.84.

Buy-Sidecar Activation

The buy-sidecar was triggered at 9:06 AM due to the rapid increase in the KOSPI. A sidecar is a mechanism designed to temporarily halt trading in futures and cash markets for five minutes when the futures price experiences a sharp rise or fall of 5% (for KOSPI) or 6% (for KOSDAQ) from the previous day’s closing price for at least one minute. This helps to stabilize the market during periods of high volatility.

Currency Market Impact

In the foreign exchange market, the USD/KRW exchange rate started at 1446 KRW, a decrease of 38.1 KRW compared to the previous day’s closing rate. This significant drop reflects the positive sentiment surrounding the tariff waiver announcement.

Overall, the South Korean stock and currency markets have responded positively to the news of the tariff waiver, indicating renewed confidence among investors. 📈