Seoul: After turbulent trading sessions, South Korean stocks closed nearly 1 percent higher on Monday as investors rallied around tech stocks, buoyed by a temporary lull in Middle East tensions. Despite this positive turn in the stock market, the South Korean won weakened against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) rose by 65.13 points, or 0.97 percent, finishing at 6,755.75. This marked a recovery from a sharp 5.72 percent decline experienced last Friday. The day's trading volume was relatively low, with 270.9 million shares changing hands, valued at 23.5 trillion won (approximately US$16 billion). The market showed a positive breadth, with 494 gainers outpacing 372 decliners.
Individual and institutional investors led the market's gains, purchasing a net 1.98 trillion won and 862.4 billion won in shares, respectively. Meanwhile, foreign investors were net sellers, offloading 2.89 trillion won in shares. The easing of military tensions in the Middle East, particularly the pause in U.S.-Iran hostilities, contributed to the positive market sentiment. The U.S. had ceased its attacks on Iran for two weeks since Friday, and Iran responded by halting its counterattacks and engaging in talks with Oman regarding the Strait of Hormuz.
With the de-escalation in U.S.-Iran tensions, oil prices saw a decline. Brent crude fell 4.7 percent to $92.27 per barrel while U.S. Texas Intermediate dropped 5.1 percent to $84.89, after both had briefly surpassed $100 per barrel the previous week. Investor confidence was further bolstered by a notable gathering of global tech leaders in San Francisco, which included Samsung Electronics Co. Chairman Lee Jae-yong and Nvidia Corp. CEO Jensen Huang. The event resulted in a series of investment agreements totaling US$950 billion.
Market analysts pointed to the successful debut of China's ChangXin Memory Technologies (CXMT) on the Shanghai Stock Exchange as another factor influencing investor sentiment. CXMT, now the world's fourth-largest memory chipmaker, follows major players such as South Korea's Samsung Electronics and SK hynix, and the U.S.' Micron Technology.
Lee Kyung-min, an analyst at Daishin Securities, noted, "Solid AI investment and collaborations with global tech companies offer upside pressure on the index." However, he added that CXMT's listing could potentially limit gains in South Korean chip stocks.
In the semiconductor sector, key stocks closed in positive territory. Samsung Electronics saw a 1.8 percent increase to 254,000 won, while SK hynix surged 3.24 percent to 1.8 million won. Hanmi Semiconductor, a chip equipment leader, added 2.25 percent to 204,500 won.
The internet giant Naver experienced a remarkable 8.43 percent rise to 225,000 won after revealing a $1 billion investment from Nvidia as part of their joint venture to establish a new data center. Other prominent stocks, such as Hyundai Motor and LG Energy Solution, also reported gains, advancing by 0.5 percent and 1.06 percent, respectively.
Conversely, shares in the oil refinery and defense sectors declined due to the easing of Middle East tensions. SK Innovation, a leading oil refiner, fell 10.3 percent to 116,700 won, while defense company Hanwha Aerospace dropped 8.17 percent to 899,000 won.
The Korean won was quoted at 1,468.5 against the U.S. dollar by the end of the trading day, marking a decrease of 1.9 won from the previous session.