Seoul: After experiencing volatile trading, South Korean stocks concluded Monday nearly 1 percent higher as investors capitalized on tech shares due to a temporary cessation of hostilities in the Middle East. However, the local currency witnessed a decline against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) increased by 65.13 points, or 0.97 percent, finishing at 6,755.75. This rebound follows a significant 5.72 percent drop on the previous Friday. Despite the positive closing, trade volume remained light, with 270.9 million shares exchanged, valued at 23.5 trillion won (approximately US$16 billion). The session saw more gainers than decliners, with 494 stocks rising and 372 falling.
The upswing was primarily driven by individual and institutional investors who purchased a net 1.98 trillion won and 862.4 billion won in shares, respectively, whereas foreign investors sold off a net 2.89 trillion won. The easing of military tensions in the Middle East, marked by the United States halting its two-week offensive against Iran, contributed to the improved investor sentiment. Iran reciprocated by ceasing counterattacks and engaging in discussions with Oman concerning the Strait of Hormuz.
This de-escalation led to a drop in oil prices, with Brent crude falling 4.7 percent to $92.27 per barrel and U.S. Texas Intermediate decreasing 5.1 percent to $84.89 after briefly reaching $100 per barrel last week.
Investor optimism was further bolstered by a notable gathering of global technology leaders, including Samsung Electronics Co. Chairman Lee Jae-yong and Nvidia Corp. CEO Jensen Huang, in San Francisco over the weekend. This event culminated in a series of investment agreements totaling US$950 billion. Analysts also highlighted the successful market debut of China's ChangXin Memory Technologies (CXMT) on the Shanghai bourse, which influenced investor sentiment in South Korea. CXMT ranks as the world's fourth-largest memory chipmaker, trailing South Korea's Samsung Electronics and SK hynix, as well as the U.S.'s Micron Technology.
Daishin Securities analyst Lee Kyung-min remarked, "Solid AI investment and collaborations with global tech companies offer upside pressure on the index," while noting that CXMT's listing might have constrained gains in South Korean chip stocks.
Major semiconductor stocks ended the day in positive territory, with market leader Samsung Electronics rising 1.8 percent to 254,000 won and SK hynix climbing 3.24 percent to 1.8 million won. Hanmi Semiconductor, a prominent chip equipment producer, gained 2.25 percent to 204,500 won. Internet giant Naver saw an 8.43 percent surge to 225,000 won following Nvidia's $1 billion investment announcement as part of their collaboration to establish a new data center. Additionally, top automaker Hyundai Motor advanced 0.5 percent to 403,000 won, and leading battery maker LG Energy Solution increased by 1.06 percent to 333,000 won.
Conversely, shares in the oil refinery and defense sectors declined amid the reduced Middle East tensions. Leading oil refinery SK Innovation plummeted 10.3 percent to 116,700 won, and defense giant Hanwha Aerospace dropped 8.17 percent to 899,000 won.
The Korean won was quoted at 1,468.5 against the U.S. dollar as of 3:30 p.m., reflecting a decline of 1.9 won from the prior session. Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys fell 9.4 basis points to 3.865 percent, while the return on five-year government bonds decreased by 9.7 basis points to 4.117 percent.