Seoul: South Korean stocks surged over 5 percent, closing at a new high on Monday as investors heavily invested in semiconductor shares amid anticipation of developments in U.S.-Iran peace discussions. The Korean won also saw a significant rise against the U.S. dollar. The benchmark Korea Composite Stock Price Index (KOSPI) climbed by 338.12 points, or 5.12 percent, to a new record high of 6,936.99.

According to Yonhap News Agency, trade volume was substantial at 864.3 million shares valued at 41.3 trillion won (US$28.2 billion), with 473 losers outnumbering 392 winners. Foreign investors purchased 3 trillion won worth of local shares, while institutions bought a net 1.9 trillion won. In contrast, retail investors sold a net 4.8 trillion won. The market opened 2.79 percent higher after U.S. President Donald Trump announced a plan to guide ships uninvolved in the Iran conflict through the Strait of Hormuz as a "humanitarian gesture" set to begin this week.

A senior Iranian official later cautioned that Tehran would view any U.S. interference in the strait as a ceasefire breach. Nevertheless, the KOSPI continued to rise in the afternoon, buoyed by foreign and institutional buying. Lee Kyung-min, an analyst at Daishin Securities, observed, "Tech shares were driven by gains on Wall Street over the weekend. Also, foreign investors expanded their net purchase ahead of the market closure for Children's Day on Tuesday."

The KOSPI surpassed the 5,000-point mark in late January and reached another milestone of 6,000 points in February. After regaining its losses in March following the U.S.-Iran war outbreak in late February, the index is now nearing the uncharted 7,000-point level, fueled by optimism over the AI boom and hopes for the key waterway's reopening.

Semiconductor stocks spearheaded the rally, with Samsung Electronics rising 5.44 percent to 232,500 won and SK hynix surging 12.52 percent to a new high of 1.4 million won, exceeding 10 trillion won in market capitalization for the first time. Hanmi Semiconductor increased by 2.72 percent to 378,000 won, and Samsung Electro-Mechanics, an electronic components affiliate of Samsung Electronics Co., soared 10.34 percent to 918,000 won.

Defense shares also performed strongly, with industry leader Hanwha Aerospace advancing 3.39 percent to 1.4 million won and LIG DandA gaining 4.46 percent to 983,000 won. Top carmaker Hyundai Motor climbed 1.51 percent to 539,000 won, and leading battery maker LG Energy Solution increased 2.5 percent to 472,000 won.

However, bio shares experienced declines as Celltrion fell 1.35 percent to 197,800 won, and Samsung Biologics dropped 2.58 percent to 1.4 million won. The Korean won was quoted at 1,462.8 won against the U.S. dollar at 3:30 p.m., up 20.5 won from the previous session, marking the highest since February 27, when the currency closed at 1,439.7 to the greenback.