Seoul: South Korean shares closed higher Friday amid hopes that the U.S. and Israel-led war against Iran, which has been weighing heavily on global financial markets, may end sooner than expected. The benchmark Korea Composite Stock Price Index (KOSPI) added 17.98 points, or 0.31 percent, to finish at 5,781.2.
According to Yonhap News Agency, the KOSPI had kicked off nearly 1 percent higher but reduced earlier gains as foreigners sold a net 2.6 trillion won (US$1.7 billion). Retail investors and institutions purchased local shares worth 2.2 trillion won and 414.8 billion won, respectively. Trade volume was heavy at 1.46 billion shares worth 31 trillion won, with winners outnumbering losers 742 to 158.
Overnight, the Dow Jones Industrial Average closed 0.44 percent lower, the tech-heavy Nasdaq composite lost 0.28 percent, and the S and P 500 dropped 0.27 percent. However, these indexes pared most of their earlier losses after Israeli Prime Minister Benjamin Netanyahu indicated the war against Iran might conclude sooner than expected, and U.S. President Donald Trump requested no further attacks on Iranian energy infrastructure.
Earlier in the week, tensions escalated as Israel attacked the South Pars gas field, Iran's largest, and Iran retaliated by striking a major liquefied natural gas site in Qatar. U.S. Treasury Secretary Scott Bessent's comments that Washington may lift its sanctions on Iranian oil at sea also contributed to improved market sentiment.
"Although geopolitical risks surrounding the Middle East have yet to be resolved, optimism over energy supply stabilization spread among investors as they digested the latest remarks by U.S. and Israeli officials," said Lee Kyoung-min, an analyst at Daishin Securities. "With easing oil prices, the South Korean stock market saw a restoration in risk appetite," he added.
In Seoul, market top-cap Samsung Electronics slipped 0.55 percent to 199,400 won, while its chipmaking rival SK hynix decreased by 0.59 percent to 1 million won. However, leading battery maker LG Energy Solution rose 1.21 percent to 375,500 won, and power plant manufacturer Doosan Enerbility surged 3.1 percent to 109,600 won.
Bio giant Samsung Biologics climbed 1.01 percent to 1.6 million won, and trading firm Samsung C and T jumped 2.23 percent to 297,500 won. Financial shares also gained ground, with Shinhan Financial up 1.45 percent to 97,900 won and Mirae Asset Securities rising 1.5 percent to 67,700 won.
Conversely, defense shares lost ground on hopes for a sooner-than-expected end to the Iran war. Hanwha Aerospace slid 4 percent to 1.32 million won, while Hyundai Rotem tumbled 3.33 percent to 180,100 won. Hanwha Systems dipped 3.55 percent to 136,000 won.
Major shipbuilder HD Hyundai Heavy lost 1.41 percent to 559,000 won, and its rival Hanwha Ocean went down 0.69 percent to 129,100 won. Leading carmaker Hyundai Motor also lost 0.96 percent to 517,000 won, and its sister company Kia contracted 1.17 percent to 168,500 won.
The Korean won was quoted at 1,500.6 won against the U.S. dollar at 3:30 p.m., edging up 0.4 won from the previous session. It marked the second consecutive day the local currency went below the psychologically important barrier of 1,500 won. On Thursday, the won was quoted at 1,501 won, the weakest since March 10, 2009, when it hit 1,511.1 won during the global financial crisis.
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 8.1 basis points to 3.41 percent, and the return on the benchmark five-year government bonds gained 3.4 basis points to 3.621 percent.