Seoul: South Korean stocks closed sharply higher on Monday, driven by substantial gains in large-cap semiconductor shares as part of a year-end rally. The local currency, the won, appreciated to its strongest level in nearly two months against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) climbed 90.88 points, or 2.2 percent, to finish at 4,220.56, the highest level since November 3. The trading volume was moderate, with 497.51 million shares valued at 14.35 trillion won (approximately US$10.02 billion), as decliners outpaced advancers 571 to 316. The index opened higher and continued to gain momentum as offshore investors shifted to net buyers.
Foreign investors acquired a net 331.46 billion won worth of shares, while institutional investors and retail investors offloaded a net 285.96 billion won and 9.06 billion won worth of shares, respectively. Han Ji-young, an analyst at Kiwoom Securities, noted that "SK hynix's removal from the investment warning list helped support investor sentiment and extend the year-end rally."
South Korea's equities and derivatives markets will be closed on Wednesday, with trading resuming on January 2 for the new year. SK hynix, a major player in the chip industry, surged 6.84 percent to 640,000 won after the Korea Exchange (KRX) removed its investment warning designation. This warning had been in place for 10 trading sessions since December 11 following recent significant gains.
Market leader Samsung Electronics saw its shares rise by 2.14 percent to 119,500 won. In the automotive sector, Hyundai Motor, the leading carmaker, advanced 2.62 percent to 293,500 won, while Kia, its sister company, increased by 1.09 percent to 121,100 won.
Defense company Hanwha Aerospace experienced a remarkable increase of 9.08 percent to 949,000 won, and nuclear power plant builder Doosan Enerbility rose by 3.94 percent to 76,500 won. However, LG Energy Solution, a leading battery manufacturer, saw a decline of 0.91 percent to 380,000 won after canceling a 3.9 trillion won supply deal with U.S.-based battery pack producer Freudenberg Battery Power System (FBPS) LLC.
In the shipbuilding sector, HD Hyundai Heavy advanced 2.15 percent to 523,000 won, while Hanwha Ocean fell by 0.77 percent to 115,600 won. Meanwhile, internet portal operator Naver surged 4.54 percent to 242,000 won, and leading steelmaker POSCO rose by 1.95 percent to 314,000 won.
The won was quoted at 1,429.8 against the greenback at 3:30 p.m., an increase of 10.5 won from the previous session. This was the strongest level since November 3, when it closed at 1,428.8 won. South Korean foreign exchange authorities have expressed concern over the won's recent "excessive" weakness and have vowed to implement "strong" policies to stabilize the market.
Bond prices, which move inversely to yields, also ended higher. The yield on three-year Treasurys decreased by 1.9 basis points to 2.939 percent, while the yield on the benchmark five-year government bonds declined by 1.4 basis points to 3.226 percent.