Seoul: South Korean stocks closed slightly higher Tuesday thanks to gains in big-cap tech and auto shares amid persisting military tensions in the Middle East. The local currency was trading slightly higher against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) added 3.64 points, or 0.12 percent, to end at 2,950.3, marking the highest level since January 13, 2022, when the index closed at 2,962.09. The trade volume was heavy with 923 million shares worth 17.7 trillion won (US$13 billion), with losers outnumbering winners 560 to 324.
Retail investors were active, purchasing 224.3 billion won worth of local shares. However, foreigners and institutions unloaded shares worth 113 billion won and 105.6 billion won, respectively. The positive sentiment was partly influenced by Wall Street's overnight gains, driven by hopes that the military conflict between Israel and Iran would not escalate further. Tehran's expression of hope to resume talks over its nuclear program, alongside strong tech shares performance fueled by discussions on artificial intelligence (AI) at the ongoing Group of Seven (G7) summit in Canada, added to the optimism.
Seoul shares started the day strongly but lost momentum after reports of U.S. President Donald Trump ending his G7 trip early due to the Israel-Iran conflict. This development suggested that it might be premature to expect de-escalation of tensions in the Middle East. Lee Kyoung-min, an analyst at Daishin Securities, noted that the KOSPI's initial strength was curbed as reports on ongoing geopolitical conflicts dampened investors' risk appetite. The cancellation of a planned summit between South Korean President Lee Jae Myung and Trump at the G7 summit also negatively impacted investors' sentiment.
In the local market, large-cap tech and auto shares supported the KOSPI. Market heavyweight Samsung Electronics climbed 1.57 percent to 58,100 won, while its chipmaking rival SK hynix increased by 0.4 percent to 249,000 won. Top automaker Hyundai Motor rose 1.74 percent to 205,000 won, with its sister company Kia jumping 2.15 percent to 99,600 won. Major shipbuilder Hanwha Ocean saw a significant rise of 7.85 percent to 92,000 won, although its competitor HD Hyundai Heavy fell 2.78 percent to 436,500 won. Defense giant Hanwha Aerospace decreased by 1.65 percent to 954,000 won, and the country's largest shipper HMM dropped 5.25 percent to 23,000 won.
The local currency was trading at 1,362.7 won against the greenback at 3:30 p.m., up 1.1 won from the previous session. Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys dropped 3.5 basis points to 2.448 percent, and the return on the benchmark five-year government bonds decreased by 1.1 basis points to 2.612 percent.