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South Korean stocks rally as North Korea comes to the negotiating table

by | 6 Mar, 2018

A North Korean soldier in the Demilitarized zone (DMZ) in North Korea. Credit: Gabriel Britto

South Korea’s benchmark KOSPI index rallied by over 1.50 percent today after the North Korean leadership met with a South Korean delegation in Pyongyang.

It was the first time Kim Jong Un had met with envoys from the South as leader of the DPRK, with the South seeking to maintain momentum through communication since the end of the Winter Olympics.

According to sources, the North has vowed to halt nuclear and missile tests if it holds talks with the U.S. – an unprecedented move that could signal a major diplomatic breakthrough in negotiations with the shadowy regime.

According to the North’s state media, Kim Jong-un said he wants to “vigorously advance” closer ties with his neighbors to pursue reunification of the Korean Peninsula.

The North and South also agreed to hold their first joint summit in over a decade in late April, which is set to take place in the border village of Panmunjom. It’s a major step in the pursuit of a diplomatic solution to pacify the DPRK’s nuclear ambitions and has been met with optimism from investors. Washington has yet to respond to the matter publicly.

Whether North Korea is sincere in its approach is questionable, especially given the fact they know South Korea is one of America’s closest allies in the Asia/Pacific region. Ever since President Trump began his term last year, rhetoric and threats exchanged between the U.S. and the DPRK reached worrying new heights, with Trump famously threatening Kim Jong Un’s regime with “fire and fury” the likes of which the world had never seen before.

Given Trump’s more aggressive posture on foreign policy (including his request for higher military spending), a diplomatic solution would be an unexpected but hugely welcome surprise not only to Washington, but also to the millions of ordinary citizens living within easy striking distance of North Korean missiles, including in Seoul and across the way in Japan, which already saw the Hwasong-12 ballistic missile fly over Hokkaido (the second largest Island in the country), prompting widespread fear of an imminent attack.

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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