Seoul: South Korean stocks closed at an unprecedented high on Monday, driven by a sustained rally in semiconductor shares alongside encouraging developments in U.S.-Iran talks aimed at resolving their prolonged conflict in the Middle East. However, the local currency weakened against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) climbed 62.13 points, or 0.69 percent, to reach 9,114.55, after initially opening 1.08 percent lower and touching a peak of 9,253.00. The trading activity was moderate, with 377.2 million shares exchanged, valued at 41.4 trillion won (approximately US$26.9 billion). The market saw 739 stocks decline while 148 advanced.
Retail investors and institutions emerged as net buyers, acquiring 2.15 trillion won and 308.4 billion won worth of shares, respectively, whereas foreign investors were net sellers, offloading 2.55 trillion won. The positive sentiment was partly fueled by the conclusion of initial U.S.-Iran discussions on Sunday, where both nations agreed on a 60-day roadmap to finalize a deal, as per a statement issued by the mediators, Qatar and Pakistan.
Despite prior threats from Tehran to close the Strait of Hormuz and U.S. President Donald Trump's reiterated warnings of potential attacks on Iran, the negotiations proceeded smoothly. "Negotiations went smoothly in general despite some aggressive messages, which were considered short-lived noises," commented Kang Jin-hyeok, an analyst from Shinhan Securities.
The semiconductor sector saw notable gains, with SK hynix rising 5.61 percent to 2.92 million won, overtaking Samsung Electronics in market capitalization for the first time. SK Square, the parent company of SK hynix, experienced a surge of 10.67 percent to 1.97 million won, while Hanmi Semiconductor increased by 2.2 percent to 301,500 won.
In the defense sector, Hanwha Aerospace rose 0.27 percent to 1.13 million won, and Korea Aerospace Industries (KAI) increased 1.43 percent to 148,600 won. Conversely, Samsung Electronics saw a slight decline of 0.14 percent to 353,500 won, and Samsung Electro-Mechanics fell 1.85 percent to 2.23 million won.
The automotive and energy sectors faced setbacks, with Hyundai Motor dropping 5.22 percent to 581,000 won and LG Energy Solution declining 4.7 percent to 385,500 won. Samsung Life Insurance and Samsung Biologics also reported losses, decreasing 9.36 percent to 450,500 won and 5.75 percent to 1.3 million won, respectively.
The Korean won declined to 1,537 against the U.S. dollar, down by 10 won from the previous session. In the bond market, prices fell, with the yield on three-year Treasurys climbing 2.6 basis points to 3.810 percent and the yield on five-year government bonds increasing by 3.9 basis points to 4.044 percent.