Seoul: Seoul shares surged over 3.5 percent on Wednesday as diminishing concerns about the profitability of artificial intelligence (AI) investments and optimism for a potential interim agreement between the United States and Iran regarding the Strait of Hormuz invigorated investor confidence.
According to Yonhap News Agency, the Korea Composite Stock Price Index (KOSPI) leapt 3.76 percent, gaining 239.31 points to settle at 6,598.26, after hitting an intraday peak of 6,674.66. The index had risen 1.62 percent on Tuesday following a significant drop of 5.12 percent the day before.
The trading volume was moderate, with 335.16 million shares valued at 25.21 trillion won (US$17.7 billion), and stocks that gained far outnumbered those that declined, 672 to 197. Foreign investors purchased a net 1.45 trillion won in stocks, whereas institutional and individual investors sold off a net 283.5 billion won and 1.18 trillion won, respectively.
The Korea Exchange (KRX) implemented a buy-side sidecar for the KOSPI for a brief five-minute period at 9:25 a.m. as the index surged on the back of gains in technology stocks. In the United States, stocks advanced overnight as investors speculated that a potential deal to reopen the essential shipping route could prolong the recent drop in oil prices and alleviate inflationary pressures.
The Dow Jones Industrial Average increased by 1.71 percent to 54,085.88, while the Nasdaq Composite, known for its tech focus, rose 2.59 percent to 26,584.99. "In addition to hopes for reopening Hormuz, strong earnings from U.S. tech companies helped alleviate concerns about substantial investment in the AI sector," commented Kang Jin-hyeok, an analyst at Shinhan Securities Co.
In Seoul, technology stocks spearheaded the gains. Market leader Samsung Electronics advanced 2.5 percent to 246,000 won, while its competitor SK hynix surged 5.77 percent to 1,668,000 won. Leading automobile manufacturer Hyundai Motor increased by 3.06 percent to 404,500 won, and Korean Air, the national carrier, rose 3.07 percent to 26,900 won.
Conversely, among the decliners, top refiner SK Innovation dropped 1.89 percent to 109,200 won, and S-Oil decreased by 2.62 percent to 122,500 won. The Korean won was quoted at 1,424.5 against the U.S. dollar by 3:30 p.m., marking a decline of 8 won from the previous day's stock trading close.
Bond prices, which are inversely related to yields, closed higher. The yield on three-year Treasurys fell by 7.1 basis points to 3.669 percent, while the yield on the benchmark five-year government bonds decreased by 8.8 basis points to 3.916 percent.