Seoul: Seoul stocks shot up by more than 2 percent Tuesday, extending their winning streak to a fourth day on optimism over a U.S.-Iran deal to end the conflict and reopen the Strait of Hormuz. The local currency weakened against the U.S. dollar. The benchmark Korea Composite Stock Price Index (KOSPI) added 180.62 points, or 2.11 percent, to close at 8,726.6.
According to Yonhap News Agency, overnight U.S. stocks rallied after U.S. President Donald Trump announced that a preliminary agreement to end the conflict with Iran had been signed, ensuring the Strait of Hormuz would be "completely opened" by Friday. This announcement led to significant gains in U.S. markets, with the S and P 500 rising 1.7 percent, the tech-heavy Nasdaq 100 gaining 3.1 percent, and the Dow Jones Industrial Average reaching a record high.
The optimism also impacted oil prices, which retreated as Brent crude fell 4.76 percent to US$83.17 per barrel, while U.S. WTI dropped 4.87 percent to $80.75 per barrel, easing concerns over inflation. Financial data displayed in Hana Bank's dealing room in central Seoul showed a moderate trade volume of 582.36 million shares worth 39.42 trillion won (US$26.08 billion), with winners outnumbering losers 518 to 359.
Foreigners and institutions were net buyers, purchasing 1.54 trillion won and 703.53 billion won, respectively, while individual investors sold a net 2.18 trillion won. Lee Kyoung-min, an analyst at Daishin Securities, noted that foreign investors drove gains in the local stock market as easing geopolitical tensions following the U.S.-Iran deal and falling oil prices strengthened risk appetite. The robust performance of U.S. tech stocks also bolstered sentiment in South Korea's semiconductor sector.
Tech shares posted gains across the board. Market bellwether Samsung Electronics increased 1.78 percent to 343,000 won, while industry rival SK hynix gained 4.11 percent to 1,382,000 won. Artificial intelligence investment firm SK Square surged 6.23 percent to 1,501,000 won.
Defense stocks also traded higher, with industry leader Hanwha Aerospace advancing 9.13 percent to 1,183,000 won, and its smaller rival LIG D and A jumping 18.85 percent to 1,002,000 won after announcing a partnership with German defense firm Rheinmetall to cooperate in air defense systems. Daewoo Engineering and Construction soared 19.87 percent to 27,450 won, fueled by expectations of new business opportunities in the Middle East amid eased geopolitical tensions.
The Korean won was quoted at 1,511.6 won against the U.S. dollar, down 0.5 won from the previous session.