Seoul: South Korean stocks surged by more than 5 percent, reaching a new high as they edged closer to the 7,000-point mark. This rise came as investors heavily invested in semiconductor shares amidst ongoing anticipation regarding U.S.-Iran peace talks. The Korean won also strengthened significantly against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) gained 338.12 points, or 5.12 percent, culminating in a record high of 6,936.99 points. The market saw a substantial trade volume of 864.3 million shares valued at 41.3 trillion won (approximately US$28.2 billion), with more stocks declining than advancing, at a ratio of 473 to 392.
Foreign investors acquired local shares worth 3 trillion won, while institutions net purchased 1.9 trillion won. Conversely, retail investors offloaded a net 4.8 trillion won. The index initially rose by 2.79 percent following U.S. President Donald Trump's announcement of a plan to guide non-conflict-related ships through the Strait of Hormuz, deemed a "humanitarian gesture." A subsequent statement by a senior Iranian official suggested Tehran would interpret any U.S. interference in the strait as a breach of the ceasefire.
Despite these geopolitical tensions, the KOSPI's gains were bolstered in the afternoon by substantial foreign and institutional buying. Analyst Lee Kyung-min from Daishin Securities noted that "Tech shares were driven by gains on Wall Street over the weekend." He also mentioned that foreign investors increased their net purchases in anticipation of the market closure for Children's Day on Tuesday.
The KOSPI crossed the 5,000-point milestone in late January and surpassed the 6,000-point level in February. After recovering from its March downturn due to the late February outbreak of the U.S.-Iran war, the index now nears the 7,000-point threshold, fueled by optimism regarding the AI boom and hopes for reopening the strategic waterway.
Semiconductor stocks were at the forefront of the rally, with Samsung Electronics climbing 5.44 percent to 232,500 won and SK hynix rising 12.52 percent to a new peak of 1.4 million won, marking a market capitalization breakthrough of 10 trillion won. Hanmi Semiconductor increased by 2.72 percent to 378,000 won, and Samsung Electro-Mechanics escalated 10.34 percent to 918,000 won.
Defense stocks also performed well, with Hanwha Aerospace advancing 3.39 percent to 1.4 million won, and LIG D and A gaining 4.46 percent to 983,000 won. Meanwhile, Hyundai Motor, a top carmaker, rose 1.51 percent to 539,000 won, and leading battery producer LG Energy Solution saw a 2.5 percent increase to 472,000 won.
Conversely, bio shares declined, with Celltrion dropping 1.35 percent to 197,800 won and Samsung Biologics decreasing 2.58 percent to 1.4 million won. The Korean won was quoted at 1,462.8 won per U.S. dollar at 3:30 p.m., reflecting a 20.5 won increase from the preceding session, marking the highest exchange rate since February 27, when the currency closed at 1,439.7 won to the greenback.