Seoul: South Korean stocks traded markedly lower late Friday morning, as investors assessed the impact of the Donald Trump administration's new tariff scheme on industry, as well as a new proposal by Seoul to raise taxes on companies and stock investors. The benchmark Korea Composite Stock Price Index (KOSPI) shed 93.92 points, or 2.89 percent, to 3,151.52 as of 11:20 a.m.
According to Yonhap News Agency, the index opened lower, tracking overnight losses on Wall Street, and extended losses further on heavy foreign and institutional selling. The latest trade deal, announced Thursday, calls for lowering the U.S.' reciprocal tariffs on South Korean imports to 15 percent from the initially proposed 25 percent. The new levies would affect South Korea's auto, steel and other major sectors, and are expected to weigh on its exports.
U.S. President Trump signed an executive order that sets new tariffs to go into effect next Thursday. Also affecting investor sentiment is the South Korean government's proposal of higher taxes on companies and stock investors. The finance ministry proposed raising corporate tax rates across all brackets by 1 percentage point while increasing the stock transaction tax from 0.15 percent to 2 percent. The threshold for the capital gains tax on stock holdings would be lowered to 1 billion won from the current 5 billion won.
Most top-cap shares lost ground. Market bellwether Samsung Electronics fell 1.82 percent, while chip giant SK hynix sank 4.94 percent. Leading battery maker LG Energy Solution shed 1.9 percent, and major bio company Samsung Biologics dipped 2.16 percent. Defense giant Hanwha Aerospace retreated 6.22 percent, and nuclear power plant manufacturer Doosan Enerbility tumbled 4.88 percent.
Top online portal operator Naver lost 3.4 percent, and leading steelmaker POSCO lost 4.54 percent. Leading shipbuilder HD Hyundai Heavy skidded 4.28 percent, but its rival Hanwha Ocean rose 0.8 percent. Top automaker Hyundai Motor traded unchanged, while its sister affiliate Kia added 0.49 percent. The local currency was trading at 1,398.9 won against the U.S. dollar at 11:20 a.m., down 11.9 won from the previous session.