Market Update: Korean Automakers and Global Stocks
Shares of South Korean automakers saw an uptick on Tuesday after U.S. Commerce Secretary Howard Lutnick announced a 15% reduction in U.S. auto tariffs on South Korea, set to take effect retroactively from November 1. Lutnick further mentioned that tariffs on aircraft parts would be eliminated, along with the reciprocal tariffs from South Korea, aligning them with those from Japan and the EU.
In response, Hyundai’s stock rose nearly 5%, while Kia saw an increase of about 3%. The Kospi index demonstrated a mixed performance, with the small-cap Kosdaq declining by 0.13% but the main index gaining 1.02%.
Interestingly, South Korea’s inflation rate noted a year-on-year rise of 2.4% in November, surpassing the 2.35% growth that economists had anticipated. Core inflation, which excludes food and energy, also increased by 2%. These figures remain unchanged from October, reinforcing the Bank of Korea’s decision to keep interest rates steady at 2.5% for the fourth consecutive meeting.
In broader market news, most Asia-Pacific indexes moved higher on Tuesday after Wall Street experienced a decline. This drop was influenced by a sell-off in cryptocurrencies, which weighed on market sentiment.
Bitcoin, for instance, fell about 6%, dipping below $86,000, which certainly dampened investor mood. It traded at approximately $86,866.49 as of 9:30 a.m. in Singapore (or 8:30 p.m. ET the previous day). The cryptocurrency had been struggling to stay above the $90,000 mark since it first fell below that threshold last month.
Other cryptocurrency-related stocks, including Coinbase, also took a hit during Monday’s U.S. trading hours. In the tech sector, companies like Broadcom and Super Microcomputer saw their shares decline more than 4% and 1%, respectively, amid a broader trend of profit-taking.
Meanwhile, Japan’s Nikkei Stock Average made gains, rising 0.54%, with the TOPIX index up by 0.44%. Gains were primarily driven by the financial, energy, and basic materials sectors. Notably, industrial robot manufacturers rose significantly; for example, Fanuc surged 5.86%, and NGK Insulators advanced by 6%. Fujikura also saw a modest increase of 2.29%.
The yield on Japan’s 10-year government bonds climbed to 1.88%, marking the highest level since June 2008, fueled by rising expectations that the Bank of Japan may increase interest rates soon. In contrast, the 20-year bond yield reached 2.915%, the highest since 1999, and the 30-year yield hit 3.411%, a record.
In Australia, the ASX/S&P200 index rose slightly by 0.12%. The Hang Seng Index in Hong Kong faced a bump, while mainland China’s CSI300 experienced a minor drop of 0.17%. Alibaba saw nearly a 3% increase in Hong Kong, continuing its upward trend for the third consecutive session, following the launch of its Quark AI glasses in China on November 27.
In the U.S., stock futures remained relatively unchanged during early Asian hours after three major benchmarks snapped a five-day winning streak. Notably, the S&P 500 dropped 0.53% to close at 6,812.63, and the Nasdaq Composite Index fell 0.38% to finish at 23,275.92. The Dow Jones Industrial Average settled down by 427.09 points, or 0.9%, at 47,289.33.
