(Seoul=Yonhap Infomax) Kyu Sun Lee – South Korean consumer stocks rallied sharply as China escalated its de facto economic and cultural retaliation against Japan, known as the 'Hanilryeong' (Japan Restriction Order).


Expectations that South Korean companies will benefit from China's suspension of Japanese seafood imports and restrictions on tourism and cultural exchanges have driven share prices higher.


As of 13:37 on the 20th, Able C&C Co., a South Korean cosmetics company, was trading at 10,850 won, up 17.04% from the previous session.


Other major cosmetics stocks, including Tony Moly Co., Amorepacific Corp., and Korea Cosmetic Co., also posted strong gains.


Market sentiment suggests that if the boycott of Japanese products spreads in China, K-beauty brands could emerge as key alternatives.


Shares in travel and casino operators surged even more sharply on expectations that Chinese tourists (Youke) will shift their travel plans from Japan to South Korea.


Lotte Tour Development Co. soared 14.45% to 22,250 won, while Paradise Co. and Grand Korea Leisure Co. (GKL) also posted significant gains.


Hansung Enterprise Co., considered a beneficiary of the Japanese seafood import ban, jumped 13.50% to 7,230 won.


CJ Corp. rose 8.95% to 190,450 won, buoyed by strong earnings at Olive Young and expectations of increased domestic and Chinese consumer demand.


Recently, in response to remarks by Japanese Prime Minister Sanae Takaichi regarding Taiwan, the Chinese government announced a halt to Japanese seafood imports and imposed restrictions on group tours to Japan and Japanese film releases, intensifying its pressure on Tokyo.


Analysts note that the difficulties South Korea faced during China's THAAD (Terminal High Altitude Area Defense) retaliation are now being directed at Japan, and that South Korean consumer and tourism sectors, which compete with Japan, stand to benefit.


However, some caution that the rally may be short-lived, driven by thematic momentum, and advise investors to closely monitor actual earnings improvements.


At the same time, South Korea's benchmark KOSPI index climbed 116.18 points, or 2.96%, to 4,045.69, regaining the 4,000 mark.


kslee2@yna.co.kr


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