Stock performance in Asia varies as Trump sets fresh tariff deadlines
In the bustling foreign exchange dealing room of Hana Bank headquarters in Seoul, a trader intently monitors financial markets on July 9, 2025. The scene depicts a trader observing the Kospi and the foreign exchange rate between the U.S. dollar and the Korean won, as Seoul shares experience a decline for the second day in a row.
The recent fluctuations in Seoul shares have been influenced by several key factors. The KOSPI surged around 35% from early April to July 2025, reaching above 3,000 points. This strong rally, however, attracted profit-taking as some investors anticipated a technical correction after such a rapid rise.
The market's momentum brought both opportunities and risks of fluctuations. Notable concern about the expiration of a 90-day reciprocal tariff suspension deadline set by the U.S. on July 9 sharpened focus on ongoing tariff talks between South Korea and the U.S. Some investors remained optimistic about a possible deal, which supported market sentiment, while others remained cautious given the residual tariff risk from former U.S. President Trump's policies.
Another factor influencing the market is the anticipated amendment to South Korea's Commercial Act, expected to be discussed in the National Assembly plenary session. This legislative move is seen as a positive development for corporate governance and reform, which many investors believe could improve shareholder returns and corporate transparency. However, there is also caution because market expectations may already have priced in anticipated benefits.
The start of the second-quarter earnings season added further uncertainty. Analysts had recently lowered the annual operating profit estimates for KOSPI-listed companies by about 6.4% compared to six months prior, which weighed on investor sentiment and contributed to market volatility.
Despite these uncertainties, the election of President Lee Jae-myung brought renewed confidence due to anticipated pro-growth reforms and a stabilized political environment. This political backdrop helped drive the strong rally in financials and other sectors, supported by expectations of improved governance and shareholder-focused policies.
On July 9, Seoul shares experienced a decline of nearly 2%. This decline was a result of profit-taking activities, as the shares had risen for two consecutive days prior to the decline due to hopes for U.S. tariff talks and the Commercial Act revision. It is important to note that this decline was not due to the financial markets being monitored (Kospi and foreign exchange rate between U.S. dollar and Korean won).
In summary, Seoul shares experienced fluctuations driven by a strong first-half rally inducing profit-taking, cautious optimism around U.S.-South Korea tariff negotiations, anticipation and uncertainty over the Commercial Act amendment, and mixed earnings outlooks amid a politically supportive environment. The trader in the dealing room of Hana Bank headquarters in Seoul continues to closely monitor these developments, as they play out in the financial markets.
The fluctuating Seoul shares are influenced by various factors, including the anticipated amendment to South Korea's Commercial Act, the expiration of the 90-day reciprocal tariff suspension deadline between South Korea and the U.S., the start of the second-quarter earnings season, and the recent lowered annual operating profit estimates for KOSPI-listed companies. These factors have created opportunities and risks in the business and finance industry, as the trader in Hana Bank's dealing room closely watches. Despite the uncertainties, the election of President Lee Jae-myung has brought renewed confidence due to anticipated pro-growth reforms and a stable political environment.
