South Korean stocks stayed mildly on positive territory on Tuesday, relieved by the news of Korea being included among the eight countries granted U.S. exemption from the reinstated sanctions on Iranian oil imports and expectations of easing trade tensions between the U.S. and China.
But investors mostly kept to the sidelines to await the crucial U.S. midterm elections set for later in the day. The benchmark Kospi briefly brushed past 2090 but closed the day at 2086.43, up 0.46 percent as foreigners and institutions continued to take profit after Friday’s sharp rebound.
The junior Kosdaq turned negative, slipping 0.06 percent to finish at 691.54.
The Korean won gained 0.01 percent against the U.S. dollar at 1123.40.
The main Kospi had tumbled to 1996.05 late last month, falling below the 2,000 mark for the first time in nearly two years. But it has since slowly recovered, partly due to signs of thawing trade relations between China and the U.S. and the latest uplift in biopharmaceutical stocks.
On Monday, Yuhan Corp., a leading Korean pharmaceutical firm, saw its shares jump nearly 30 percent on news of its $1.25 billion licensing deal with Janssen Biotech Inc. The mega deal renewed optimism across the bio sector, pushing up the prices of other bio majors including Celltrion Inc., Samsung BioLogics Co. and Celltrion Healthcare Co. The pharmaceutical sector gained 0.95 percent led by Yuhan’s 8.2 percent additional jump.
“It’s important to note how the midterm elections have historically affected global financial markets,” said Kim Yong-gu, an analyst at Hana Financial Investment Co. “Markets would see increased volatility ahead of the elections but tend to stabilize afterwards amid resolved market risks.”
By Moon Il-ho and Kim Hyo-jin
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