Seoul: South Korean stocks surged to a new all-time high on Monday, driven by significant advancements in artificial intelligence (AI)-related stocks. The local currency also saw an increase against the U.S. dollar.
According to Yonhap News Agency, the Korea Composite Stock Price Index (KOSPI) jumped 311.85 points, or 3.68 percent, closing at 8,788.38, following an intraday peak of 8,874.16. The index opened at a record high and continued to climb, which led the Korea Exchange (KRX) to initiate a buy-side sidecar, pausing program trading of KOSPI stocks for five minutes around 11:30 a.m.
The trading volume was substantial, with 618.17 million shares exchanged, valued at 69.4 trillion won (US$46.1 billion). Despite the rally, losers outnumbered winners, 712 to 194. Institutional investors and individuals purchased a net 2.53 trillion won and 377.31 billion won, respectively, while foreign investors sold off a net 2.91 trillion won.
While the United States and Iran continued negotiations over a draft agreement to end the conflict and reopen the Strait of Hormuz, a lack of progress over the weekend contributed to a rise in oil prices. Despite the ongoing Middle East discussions, chipmakers experienced a rally due to expectations that the AI-driven semiconductor boom would persist.
South Korea's exports witnessed a 53 percent rise year-on-year, reaching a new monthly high of US$87.8 billion in May, fueled by the ongoing semiconductor supercycle, as indicated by government data. Anticipation of potential partnerships arose with upcoming visits by U.S. chip giant Nvidia Corp. CEO Jensen Huang to South Korea, further boosting AI and robot-related stocks.
During the Computex conference in Taipei, Huang announced that Nvidia's Vera CPU, designed for AI agents, would utilize high-bandwidth memory (HBM) chips from Samsung Electronics, SK hynix, and Micron. This announcement, coupled with expectations surrounding his visit to South Korea, positively impacted investor sentiment towards chipmakers. Lee Kyung-min, an analyst at Daishin Securities, noted the sharp rally in Samsung Electronics shares, which had previously underperformed compared to SK hynix.
"Large-cap AI and robotics-related stocks are leading the broader market gains due to potential cooperation with Nvidia," Lee added.
Samsung Electronics saw a significant leap of 10.09 percent, reaching a record high of 349,000 won, while SK hynix rose 1.29 percent to 1.36 million won. Hyundai Motor, a top automaker, increased by 3.73 percent to 750,000 won, and AI investment firm SK Square climbed 1.87 percent to 1.25 million won.
LG Electronics soared 29.86 percent to 380,500 won, and internet portal operator Naver surged 16.03 percent to 271,500 won amid reports of potential discussions with Huang regarding AI partnerships.
The Korean won was quoted at 1,504.3 won per U.S. dollar at 3:30 p.m., marking an increase of 3.6 won from the previous session. Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 5.9 basis points to 3.790 percent, while the five-year government bonds yield increased by 7.2 basis points to 3.996 percent.