May 25, 2018 / 3:03 AM / a month ago

S.Korea stocks, won shrug off cancellation of Trump-Kim summit

    * KOSPI and won weaken marginally 
    * N.Korea-exposed shares fall, some heavyweights rise
    * Investors hopeful of an eventual summit - analyst

    SEOUL, May 25 (Reuters) - South Korean markets reacted
calmly to President Donald Trump's cancellation of a summit with
North Korea, with shares and the won down slightly on Friday
after Pyongyang's measured response to the announcement.
    Some market players said they remained hopeful there still
will be a summit eventually between Trump and North Korean
leader Kim Jong Un. 
    The Korea Composite Stock Price Index (KOSPI)         was
down 0.1 percent at 2,462.90 points as of 0253 GMT.
    The won            stood at 1,078.7 against the dollar, down
0.1 percent versus Thursday's close of 1,079.6.
    "Other than some of those North Korea-related stocks,
overall the KOSPI is doing fine,"  said Seo Sang-young, a stock
analyst at Kiwoom Securities, adding that many investors are
hopeful a summit is not derailed indefinitely.
    North Korea said it hoped for a "Trump-style solution" to
resolve the standoff over its nuclear weapons programme.
            
    Seoul-listed stocks linked to North Korea took hits.
    Hyundai Elevator            , the top shareholder in Hyundai
Asan, which operated tours to North Korea's Mount Kumgang,
dropped as much as 18.7 percent. 
    Hyundai Rotem            , manufacturer of railway vehicles,
tumbled as much as 23.5 percent. South Korea's railway-related
shares had a big rally when leaders of South Korea and China
agreed that North Korea should be guaranteed economic aid if it
were to undertake complete denuclearisation.             
    But market heavyweights such as Samsung Electronics
            and SK Hynix            , which usually fall when
there political tensions over the Korean peninsula, were up 1.6
percent and 2.6 percent, respectively.
    In spite of the summit cancellation, offshore investors were
on track to be net buyers for the day, purchasing 154.5 billion
Korean won ($143.25 million) of KOSPI shares near mid-session.
    Declining issues outnumbered advancing ones 707 to 144. 
    The spread on South Korea's 5-year credit default swap
               , the contract that offer investor protection
against default on debt - rose to 45/47 basis points on early
Friday, up slightly from 44/45 basis points a day earlier.
    June futures on three-year treasury bonds         gained
0.03 points to 107.88. 
    
                       0253 GMT    Prev close
 Dollar/won             1,078.7       1,079.6
 Yen/won             9.8386/507        9.8901
 *KTB futures            107.88        107.85
 KOSPI                 2,462.90      2,466.01
 * Front-month futures on three-year treasury bonds

For a round up of market news, please see our daily Asia Morning
Call report            

 (Reporting by Dahee Kim; Additional reporting by Cynthia Kim;
Editing by Richard Borsuk)
  
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