Seoul: Seoul stocks experienced a significant surge on Wednesday, fueled by gains in chipmakers and major tech shares, as investors grew optimistic about a potential resolution to the ongoing U.S.-Iran conflict. The positive sentiment also led to a strong appreciation of the Korean won against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) climbed 426.24 points, or 8.44 percent, reaching 5,478.7 and breaking a four-day losing streak. This marked the second-largest increase ever recorded for the index, with the largest being on March 5, when it jumped 490.36 points.
The day's trading volume was moderate, with 942.93 million shares exchanged, valued at 27.31 trillion won (approximately US$18.19 billion). The market saw a broad-based rally, with 837 stocks advancing while only 70 declined. Despite the gains, foreigners and retail investors sold shares worth a net 612.61 billion won and 3.76 trillion won, respectively, as institutions bought shares worth a net 4.03 trillion won.
The rally was influenced by overnight gains on Wall Street, as the KOSPI opened nearly 5.5 percent higher and continued to climb due to robust institutional buying. The Korea Exchange (KRX) implemented a five-minute buy-side sidecar shortly after the market opened, pausing program-driven buy orders in KOSPI futures to manage market volatility.
A similar buy-side sidecar was triggered on the tech-centric Korea Securities Dealers Automated Quotation (KOSDAQ) market, which closed at 1,116.18, up 6.06 percent for the day. The optimism followed statements from U.S. President Donald Trump and Iranian President Masoud Pezeshkian, suggesting a potential de-escalation of military operations and a willingness to end the conflict under certain conditions.
The U.S.-Iran conflict, which began after U.S.-Israeli strikes on Iran in late February, has disrupted global oil supplies, impacting financial markets and stoking fears of inflation and economic slowdown. Despite these challenges, a monthly outlook report by KB Securities indicated that strong corporate earnings could support a market rebound even after significant declines.
Investor sentiment was further buoyed by South Korea's inclusion in the World Government Bond Index (WGBI), managed by FTSE Russell. This development is expected to lead to an influx of foreign funds into the local market over the next eight months.
Leading the market's upturn were big-cap tech stocks, with Samsung Electronics rising 13.4 percent to 189,600 won, and SK hynix increasing 10.66 percent to 893,000 won. Other notable gainers included Hyundai Motor, Kia, LG Energy Solution, and POSCO, among others.
In the defense and energy sectors, Hanwha Aerospace saw a 6.73 percent increase, and Doosan Enerbility rose 8.5 percent. Financial and shipbuilding stocks had mixed outcomes, with KB Financial growing 4.51 percent, while HD Hyundai Heavy experienced a 2.9 percent decline.
The Korean won was quoted at 1,501.3 against the U.S. dollar by the end of the trading session, reflecting an increase of 28.8 won from the previous day.