March 23, 2018 / 2:32 AM / a month ago

S.Korea stocks, won slide on fears of a U.S.-China trade war

    * KOSPI slides more than 2 pct, won down nearly 1 pct
    * Global trade war fears hurt market sentiment
    * S.Korea's steel imports were given tariff exemption from
the US

    SEOUL, March 23 (Reuters) - South Korean shares and its won
currency slumped to two- and three-week lows on Friday as the
United States and China exchanged blows over import tariffs,
unnerving markets with fears of a trade war.
    President Donald Trump gave notice on Thursday U.S. time
that he would impose tariffs on Chinese products to protect
American industries, although his actions appeared to be more of
a warning shot than the start of a global trade war.
            
    China's embassy in Washington vowed Beijing would "fight to
the end" in any trade war.
    ""We will retaliate. If people want to play tough, we will
play tough with them and see who will last longer," Ambassador
Cui Tiankai said in a video posted to the embassy's Facebook
page.             
    The Korea Composite Stock Price Index (KOSPI)         was
down 2.2 percent at 2,441.51 points as of 0217 GMT, its lowest
intraday trading level since March 9.
    The won            was quoted at 1,080.3 versus dollar, 0.7
percent lower than Thursday's close of 1,072.7. It was the
weakest intraday level since March 5.
    "A possible trade war between the United States and China is
especially serious for the South Korean economy as it could
directly or indirectly affect the country's trade with them as
well," said Seo Sang-young, a stock analyst at Kiwoom
Securities.
    Both countries are major South Korean trade partners.
    South Korea was exempted from U.S. tariffs on its steel
exports, which supported steelmaker stocks in early trade, but
the shares soon pared gains as market focus moved to bigger
global trade fears.             
    Posco             fell more than 4 percent and Seah Steel
            lost 2 percent, reversing previous gains. Dongbu
Steel             managed to stay in positive territory, up 5.6
percent.
    Kiwoom Securities' Seo said that the market impact of
Trump's trade measures would depend on Beijing's reaction in the
 near term, noting Trump still described China as a friend and 
negotiations were ongoing.
    Other market heavyweights also posted losses, with Samsung
Electronics             and SK Hynix             both down more
than 3 percent. 
    Offshore investors were set to be net sellers, offloading
158.6 billion Korean won ($146.87 million) worth of KOSPI shares
near mid-session, weighing on the index. 
    Declining issues far outnumbered advancing ones by 776 to
75.
    June futures on three-year treasury bonds         rose 0.08
point to 107.64. 
    
                       0217 GMT    Prev close
 Dollar/won             1,080.3       1,072.7
 Yen/won           10.2965/3081       10.2594
 *KTB futures            107.62        107.54
 KOSPI                 2,441.51      2,496.02
 * Front-month futures on three-year treasury bonds

For a round up of market news, please see our daily Asia Morning
Call report            

 (Reporting by Dahee Kim
Editing by Eric Meijer)
  
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