'Korea-US Tariff' Looms, Steel and Finance Sectors Strong... "Mixed Reactions Amidst Sorting Out the Wheat from the Chaff"

[Financial News] President Donald Trump of the United States imposed a 25% reciprocal tariff on Korea, deferring it until August 1, easing some market tensions. In the securities industry, it is advised that this deferral is not a fundamental solution and that a response by sector is necessary.
According to the Korea Exchange on the 14th, during July 1-14, the top 1 and 2 in the overall index growth rate were the representative export stocks 'KRX 300 Materials (13.68%)' and 'KRX Steel (12.08%)'. Meanwhile, the representative domestic stocks 'KRX Bank (10.96%)', 'KRX Insurance (10.25%)', and 'KRX 300 Finance (9.39%)' ranked 3rd to 5th.
The fact that both export and domestic stock-related indices were listed in the top growth rates is interpreted as a result of investors' mixed responses to President Trump's tariffs.
In the case of steel, the expectation of tariff negotiations with President Trump and the news of the domestic steel industry's anti-dumping investigation results on Chinese steel filed with the Ministry of Trade, Industry and Energy's Trade Commission, among other favorable factors, led to a significant upward trend.
Park Seong-bong, a researcher at Hana Securities, said, "The tariff on Chinese hot-rolled products in Vietnam is also expected to benefit domestic companies," adding, "According to the tariff application standards announced by Vietnam on the 6th, the highest tariff of 27.83% is imposed on products from Angang, the second-largest steel company in China, and Shagang, the largest electric furnace company in China."
On the other hand, representative domestic stocks such as banks and securities, which are finance-related stocks, continue their upward rally mixed with expectations of policy benefits such as the amendment of the Commercial Act by the Lee Jae-myung government and the uncertainty of tariff negotiations. In particular, the mandatory share buyback policy and interest rate cut expectations are highlighting investment attractiveness.
In the securities industry, it is believed that despite the tariff deferral, differentiated trends by sector are likely to continue. Among export stocks, concerns about tariff burdens and performance slowdowns remain, while the financial and domestic sectors are evaluated to have additional upward potential as policy expectations materialize. However, it is pointed out that if the US interest rate cut is delayed or tariff negotiations ultimately break down, market uncertainty could increase again.
Na Jeong-hwan, a researcher at NH Investment & Securities, analyzed, "The policy momentum was highlighted again with the news that the government and the ruling party are pushing for an amendment to the Commercial Act that includes mandatory share buybacks," but "as the earnings forecasts for sectors exposed to US tariffs such as automobiles are revised downward, there is also a possibility that the earnings forecasts for the KOSPI index this year will be revised downward."   


koreanbae@fnnews.com Bae Hangul Reporter