“Unlike Clinton, who’s set out policies that more or less maintain the status quo, Trump’s election pledges include fierce reforms, repealing regulations, and renegotiating foreign agreements, all of which are much more difficult to fulfill.” (image: Wikimedia)
SEOUL, Sept. 28 (Korea Bizwire) – The Korean stock market was very much affected by the first U.S. presidential debate, and was clearly in favor of Democratic candidate Hillary Clinton.
Korea’s representative KOSPI index opened Tuesday with doubts over the first debate, but with Clinton gaining strength against Donald Trump as the debate progressed, the index rebounded sharply. Driven further by a CNN poll of debate-watchers announcing a 62 – 27 percent victory for Clinton, the KOSPI closed at 2,062.82 with a 15.71-point hike.
The KRW/USD exchange rate also fell with the debate ending in Clinton’s favor, strengthening the national currency. The rate, which stood at 1,103.3 KRW/USD when markets opened on Tuesday, began to fall halfway into the debate, and continued to drop until the debate ended. The rate settled Tuesday at 1096.5 won, the first time it fell below 1,100 won in nine days.
Uncertainty is almost always unfavorable in financial markets, and a Clinton presidency is considered a “safer scenario”, said experts.
Although both candidates have supported trade protectionism, which could impose burdens on emerging nations and their stock markets, the general consensus is that a Trump triumph in the coming election would be a far greater risk to South Korea.
The Republican candidate has time and time again emphasized withdrawing American troops from Korea, and has discussed renegotiating the Korea-U.S. free trade deal.
“We’ve seen several times in the past that when the American government switches from Democratic to Republican, it puts a strain on the Korean stock market,” said Kim Young-hwan, a researcher from Shinhan Investment Corp. “And Trump is unlike any of the traditional Republicans. He keeps changing his positions, thus creating more anxiety in the market over his future policies (as potential president).”
Ok Hye-in, a Samsung Securities researcher, also said that “geopolitical risks will rise if Trump is elected, with further unpredictability.”
“Unlike Clinton, who’s set out policies that more or less maintain the status quo, Trump’s election pledges include fierce reforms, repealing regulations, and renegotiating foreign agreements, all of which are much more difficult to fulfill.”
By Kevin Lee (kevinlee@koreabizwire.com)
