증시 대담
It's time now for an in-depth look at the market action here in Korea and around the world. And for that I'm joined on the line by Dr. Hwang Seiwoon, research fellow at the Korea Capital Market Institute.
Dr. Hwang, thanks for coming on today.
The U.S.-China trade war continues to weigh on Wall Street. Markets reopened on Tuesday after a holiday the Nasdaq down around 4 tenths of a percent, and the S&P down more than double that. Take us through today's trade.
U.S. stocks fell to the lowest since March as a rally in 10-year Treasuries rekindled concern that a key recession signal has started to flash warnings amid what could be a protracted trade dispute with China. Stalled talks in the U.S.-China trade war and escalating tensions have soured sentiment for risk assets. That’s driven sovereign bonds higher and pushed global stocks toward their first monthly decline of 2019. With the Federal Reserve reiterating last week that it remains fully in patience mode, investors have little reason to bid stocks higher.
Asian shares stumbled on Wednesday and global bonds rallied as investors fretted over the outlook for world growth. Japan’s Nikkei faltered 1.14 percent while South Korea’s KOSPI was 1.18 percent lower than the previous session. In contrast, China’s Shanghai Composite rose 0.61 percent.
Now, exchange rates, which have been affected by the U.S.-China tensions. The Treasury Department has just released its report, and it has, perhaps surprisingly, decided not to label China a currency manipulator. China is on the watch list, though. How have the markets responded?
The Trump administration again refrained from labeling China a currency manipulator on Tuesday, a decision that leaves one of the president’s campaign promises unfulfilled but avoids further escalation in the trade war between the world’s two largest economies.
Impact from the currency debate to the stock markets is not quite sizable so far. Beyond the currency debate, trade dispute is still the largest battle-field of the global stock markets. The fact that China wasn’t labeled a currency manipulator suggests the two nations are continuing their dialogue. However, this doesn’t mean markets should be optimistic.
Even after the report was released, the local currency kept its losing momentum. The local currency was trading at 1,193.40 won against the U.S. dollar, up 3.9 won from the previous session's close on risk-off sentiment. The Korean won had lost 4.6 percent against the greenback since April.
Now let's bring it back here to Korea. The government taxes the buying and selling of stocks, regardless of whether the investor made money or not. This transaction tax is going to be lowered, effective tomorrow May 30th, by 5 one-hundredths of a percent, so on the KOSPI it'll be 1 tenth of a percent. Will this have the desired effect of stimulating the stock market?
The government will begin to lower the tax rate on securities transactions by 0.05 percentage point from June in
