Seoul: South Korean stocks opened significantly higher Tuesday, rebounding from the previous session's over 8 percent decline, as major technology shares recovered amid a ceasefire between Israel and Iran. The sentiment that business fundamentals of sectors related to artificial intelligence (AI) remain strong also contributed to the upswing.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) opened 2.85 percent higher and continued its upward trajectory, rising 247.84 points, or 3.31 percent, to 7,732.25 as of 9:15 a.m. The surge prompted the Korea Exchange to activate a buy-side sidecar for the KOSPI at around 9:12 a.m., temporarily halting program trading for five minutes.
The recovery followed a steep drop in the KOSPI on Monday due to concerns over AI profitability and potential rate hikes by the U.S. Federal Reserve, exacerbated by unexpectedly strong U.S. jobs data for May. Meanwhile, major U.S. indexes closed mixed as investors responded to the news of a halt in hostilities between Israel and Iran, following a warning from U.S. President Donald Trump, and a rebound in technology stocks after their significant fall on Friday.
In the U.S., the Dow Jones Industrial Average closed 0.16 percent lower, while the S and P 500 rose 0.3 percent and the Nasdaq composite, which is tech-heavy, added 0.86 percent. Notable gains were seen with Micron surging 9.87 percent, SanDisk rising 5.3 percent, Nvidia gaining 1.73 percent, and AMD increasing 5.14 percent, driven by optimism in the AI sector.
Back in Seoul, market leader Samsung Electronics saw a 4.06 percent jump, and its chipmaking competitor SK hynix soared 6.59 percent. AI investment firm SK Square climbed 6.44 percent, while Samsung Electro-Mechanics rose 10.04 percent. In the automotive sector, Hyundai Motor increased by 2.35 percent, and Kia advanced by 6.01 percent. Meanwhile, Doosan Enerbility and Hanwha Aerospace recorded gains of 3.96 percent and 1.79 percent, respectively.
Conversely, internet portal operator Naver fell 5.91 percent following a sharp rise the previous day, and LG Electronics decreased by 6.9 percent. The Korean won was trading at 1,531.2 against the U.S. dollar at 9:15 a.m., reflecting an increase of 3.8 won from the previous session.