Seoul: South Korean stocks rebounded by more than 2 percent to settle above the 7,800-point mark Wednesday as investors scooped up semiconductor and auto shares amid lingering Middle East tensions ahead of the U.S.-China summit. The local currency declined against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) opened 1.69 percent lower but reversed course to close at 7,844.01, up 200.86 points, or 2.63 percent. This reversal followed a 2.29 percent decline on Tuesday, which ended a five-session bullish run driven by tech stocks.
Trade volume was notably heavy at 733.4 million shares, valued at 49.7 trillion won (US$33.4 billion), with losers outpacing winners 599 to 281. Individual investors and institutions played a significant role in the upward movement, purchasing a net 1.9 trillion won and 1.7 trillion won worth of stocks, respectively, while foreign investors sold a net 3.7 trillion won.
U.S. inflation data revealed a sharp rise in April, marking the fastest pace in nearly three years, while oil prices surpassed US$100 per barrel amid fading hopes for a Middle East peace deal. Nonetheless, investor sentiment improved on expectations that the upcoming U.S.-China summit could alleviate concerns over the Iran conflict.
Market sentiment further benefited from domestic developments, as the prime minister and finance minister urged Samsung Electronics' management and labor to reconvene for discussions on pay raise and bonus payments. Previous mediation talks had failed to resolve these issues.
"Eased risks at home and abroad helped the KOSPI turn around," noted Lee Kyung-min, an analyst at Daishin Securities. "Artificial intelligence (AI)-related stocks, such as Samsung Electronics, SK hynix, and SK Square, led the uptick."
President Lee Jae Myung clarified that his chief policy adviser's recent viral post regarding redistributing profits from the AI boom pertained to a review of distributing surplus tax revenue, rather than imposing a new levy on corporate profits. Conversely, remarks on profit sharing of tech companies in the AI era by Seoul's presidential policy chief Kim Yong-beom had previously dampened investor sentiment.
On Wednesday, semiconductor and auto shares emerged as the biggest winners. Samsung Electronics rose 1.79 percent to 284,000 won, and SK hynix jumped 7.68 percent to 1.98 million won. SK Square also saw gains, climbing 5.68 won to 1.19 million won, while Samsung Electro-Mechanics surged 7.41 percent to 1.03 million won.
Top carmaker Hyundai Motor recorded a significant increase of 9.91 percent to 710,000 won, with its sister company Kia advancing 6.65 percent to 197,500 won. Major retailer Shinsegae soared 9.29 percent to 482,500 won, while Lotte Shopping added 5.54 percent to 160,100 won.
Conversely, defense giant LIG D and A experienced a slight decline of 0.68 percent to 873,000 won, and leading banking group KB Financial Group lost 1.04 percent to 152,000 won. In the biotech sector, Samsung Biologics decreased 2.29 percent to 1.41 million won, and Celltrion dropped 1.45 percent to 190,500 won.
The Korean won was quoted at 1,490.6 won against the U.S. dollar at 3:30 p.m., having briefly touched the 1,499.9-won level earlier in the day.