Seoul: South Korean stocks soared to a new record high, surpassing the 5,300-point mark for the first time on Wednesday, driven by a strong demand for artificial intelligence (AI)-related shares. Meanwhile, the Korean won depreciated against the U.S. dollar.
According to Yonhap News Agency, the Korea Composite Stock Price Index (KOSPI) ended the day up by 83.02 points, or 1.57 percent, closing at 5,371.1. The index's rise was bolstered by robust buying activity from institutional investors, who acquired a net total of 1.8 trillion won (approximately US$1.2 billion) in equities.
Conversely, foreign and retail investors were net sellers, divesting 940 billion won and 1 trillion won worth of shares, respectively. The trading volume was substantial, with 781 million shares exchanging hands, valued at 30.1 trillion won. Advancing stocks outpaced declining ones, with 747 gainers against 156 losers.
The U.S. stock market experienced a downturn overnight, amid renewed apprehensions about the AI sector following reports of a potential rift between Nvidia and OpenAI regarding their $100 billion data center agreement. Additionally, the debut of AI startup Anthropic's new chatbot plug-in, aimed at facilitating core legal tasks, exerted pressure on tech shares due to concerns about AI's transformative impact on the software industry.
Lee Kyoung-min, an analyst from Daishin Securities, remarked, "Neither of the two factors are reasons that can deteriorate AI demand. Rather, it represents the market's adaptation to changes in the AI industry, the interests of companies in the AI sector and their profit models." Lee further noted that sustained optimism in AI bolstered sectors tied to AI infrastructure, including nuclear energy, electronics, and semiconductors.
Investor confidence received an additional boost from expectations that the government's capital market reform initiatives might soon be implemented. The ruling Democratic Party's floor leader pledged on Wednesday to expedite the passage of related legislation, including a third round of amendments to the Capital Markets Act.
Among large-cap stocks, semiconductor giant Samsung Electronics gained 0.96 percent to close at 169,100 won, while its competitor SK hynix dipped 0.77 percent to 900,000 won. Battery manufacturer LG Energy Solution climbed 2.94 percent to 402,500 won, and nuclear power plant constructor Doosan Enerbility surged 5.81 percent to 96,500 won. However, portal operator Naver saw a decline of 1.67 percent, ending at 264,500 won.
Hanwha Solutions, a solar module producer under Hanwha Group, hit its daily permissible limit and concluded the session at 36,450 won after its U.S. subsidiary secured an energy storage supply agreement with LG Energy Solutions.
The local currency was quoted at 1,450.2 won per U.S. dollar at 3:30 p.m., marking a decrease of 4.8 won from the previous session. Bond prices, which move inversely to yields, ended lower. The yield on three-year Treasurys increased by 2.3 basis points to 3.212 percent, and the yield on five-year government bonds rose by 3.8 basis points to 3.533 percent.