BENGALURU: South Korean shares jumped to a 10-month high and the won firmed on Wednesday after liberal candidate Lee Jae-myung won the presidential election, while other regional currencies were tepid as investors awaited developments in trade talks with the US.
Lee began his term on Wednesday, just hours after his victory in Tuesday’s snap election. He has vowed to bring corporate reform measures to boost the domestic stock market, raise investment in artificial intelligence, and revive an economy reeling from slowing growth.
With South Korea’s key sectors from chips to autos heavily exposed to global trade, all eyes will also be on Lee’s ability to negotiate a favourable trade deal with the US
The country’s benchmark stock index KOSPI surged 2.5% to its highest level since early August 2024. The won, which is up more than 7% this year, appreciated 0.2% to 1,374.4 per dollar.
Analysts at TD Securities said “better days” are ahead for the won.
“The risk premium from the political turmoil in Dec’24 have capped KRW’s gains relative to peers amid the USD sell off this year. We see two wins for KRW on the horizon with an imminent fiscal package and a swift US-South Korea trade deal,” they said in a note.
Other regional currencies were either flat or marginally lower against the greenback as the market focus turns to a Wednesday deadline for countries to submit their best proposals for trade deals with the US and thus a chance to avoid Trump’s hefty tariffs.
A possible call between Trump and Chinese leader Xi Jinping is also in the spotlight this week.
Trade tensions between the world’s two biggest economies have flared anew since Trump accused China of violating an agreement to roll back tariffs and trade restrictions – claims Beijing has dismissed as “groundless”.
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