S.Korean stocks up after Park’s impeachment ruling
(CNBC) – South Korean equities rose slightly amid growing political uncertainty after President Park Geun-hye’s impeachment ruling.
The benchmark Kospi gained 0.17 percent after the Constitutional Court upheld a parliament vote made late last year to impeach Park. She will now leave the office immediately and snap elections must be held within 60 days for her replacement.
Large crowds of supporters and critics of Park gathered in downtown Seoul in rowdy and intense sloganeering, with thousands waving the national flag and clamoring on top of buses. The police stepped up security in the central areas and mobilized more than 20,000 officers to stand guard.
This decision will drive South Korea “into near-term political uncertainty and the likely further escalation of economic risks facing South Korea,” said Rajiv Biswas, Asia Pacific chief economist at IHS Markit, in a Friday note.
Biswas added that the country is “entering a political vacuum at a time when tensions with North Korea have escalated to crisis point” and when relations with China are tense.
South Korean companies doing business in China have faced pressure, including boycotts and cyber-attacks, over the US-deployed anti-missile defense system which Beijing views as a threat. China exports account for about 25.1 percent of total South Korean exports globally, according to data from IHS Markit.
Meanwhile, the won opened weaker in onshore trade at 1,161 per dollar versus 1,158.1 at the previous close. At 11:45 am HK/SIN, the won was stronger against the dollar, at 1,157.4.
Asian markets open mixed
The Shanghai composite was down 0.03 percent and the Shenzhen composite gained 0.253 percent. Hong Kong’s Hang Seng was down 0.08 percent.
China’s Fosun Pharmaceuticals is holding early-stage talks with buyout funds including CVC about a potential joint bid for German generic drugmaker Stada, Reuters reported. Fosun Pharma shares were up 0.86 percent.
Japanese benchmark Nikkei 225 was sharply higher by 1.25 percent as the yen weakened against the greenback.
Toshiba shares plunged 4 percent during early trade before sliding back to trade up 1.46 percent, on concerns over news that Toshiba’s US subsidiary hired bankruptcy attorneys to consider Chapter 11 filing as an option to help with a multi-billion dollar write-down.
Australia’s ASX 200 was in positive territory, up 0.56 percent.
Another focus for traders is the US nonfarm payrolls, which is due later in the day. The payrolls are a key indicator which will provide hints as to whether the Federal Reserve will raise rates at its meeting next week.
“This is the last piece of puzzle when it comes to the US interest rate hike which the Fed is going to make. So far the Fed has adopted a very hawkish tone when it comes to the interest rate hike,” said Naeem Aslam, chief market analyst from ThinkMarkets in a Friday note.
Nonfarm payrolls in February are expected to have gained 190,000 jobs after shooting up 227,000 in January, according to a Reuters poll of economists.
Over in the US, the Dow Jones industrial average was nearly flat at 20,858.19, while the S&P 500 was up 0.08 percent at 2,364.87 and the Nasdaq composite was also nearly flat at 5,838.81.
CAPTION:
Top: South Korean President Park Geun-Hye delivers an address to the nation on November 4, 2016 in Seoul. Photo: Ed Jones / Pool / Getty Images via CNBC
SOURCE: CNBC’S Aza Wee Sile
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