Seoul: South Korean stocks ended nearly 1 percent higher Tuesday, buoyed by gains in technology shares, as market participants focused on the possibility of U.S.-Iran talks resuming in Qatar. The Korean won weakened against the U.S. dollar amidst these developments.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) climbed 81.83 points, or 0.97 percent, closing at 8,476.47. Investor sentiment was uplifted by the anticipation of renewed discussions between the United States and Iran in Qatar, aimed at reducing tensions in the Strait of Hormuz, which could potentially mitigate concerns regarding prolonged disruptions in global oil supplies.
The positive sentiment in Seoul mirrored the overnight performance on Wall Street, where tech stocks saw a significant rebound. The Dow Jones Industrial Average increased by 0.59 percent to reach a record high, while the Nasdaq composite surged 2.07 percent, and the S and P 500 rose 1.18 percent.
Crude oil prices saw a modest rise as investors kept an eye on the implementation of the proposed U.S.-Iran peace framework. The trading volume was moderate, with 444.61 million shares changing hands, valued at 41.08 trillion won (approximately US$26.51 billion), and the number of decliners surpassing gainers 621 to 261.
Institutional investors and individuals contributed by purchasing a net 2.93 trillion won and 833.45 billion won worth of shares, respectively. Conversely, foreign investors sold a net 3.79 trillion won. "Investors scooped up semiconductor shares following recent losses, while IT infrastructure and electricity stocks rose on hopes for major investment in semiconductor infrastructure in the southwestern region announced by the government and chipmakers," explained Lee Kyoung-min, an analyst at Daishin Securities.
Tech shares were the main drivers of the market's overall performance. Market leader Samsung Electronics saw a rise of 3.41 percent to 334,000 won, while chip giant SK hynix increased by 0.84 percent to 1.65 million won. SK Square, the parent company of SK hynix, advanced 3.48 percent to 1.69 million won. Notably, Samsung Electro-Mechanics experienced a 7.16 percent jump to 1.18 million won after securing a 454 billion-won supply deal for multilayer ceramic capacitors (MLCCs) for artificial intelligence servers with a U.S.-based customer.
However, battery shares experienced a pullback due to profit-taking after substantial gains in the previous session. LG Energy Solution saw a sharp decline of 9.61 percent to 362,000 won, with its competitor Samsung SDI dropping 4.88 percent to 487,000 won.
The Korean won was quoted at 1,549.4 won per U.S. dollar as of 3:30 p.m., marking a decrease of 4.2 won from the previous session. In the bond market, prices closed higher, with the yield on three-year Treasurys dropping 3 basis points to 3.703 percent, and the return on five-year government bonds falling 4 basis points to 3.925 percent.