SEOUL – South Korean stocks reached a two-month high on Tuesday, rising over 1 percent, buoyed by news of an extended cease-fire in the Middle East. The Korea Composite Stock Price Index (KOSPI) surged 26.10 points, or 1.05 percent, to close at 2,521.76, the highest since September 20. This upswing in the market coincided with the local currency's sharp rise against the U.S. dollar.
According to Yonhap News Agency, the KOSPI's performance was influenced by the extension of the truce between Israel and Hamas for an additional two days, boosting investor sentiment. Trading volume was moderate with 435.8 million shares traded, valued at 8.59 trillion won (approximately US$6.64 billion). Individual investors led the market's gains, purchasing 572.6 billion won worth of shares, while foreign and institutional investors offloaded a combined total of 574.5 billion won.
Choi Yoo-jun, an analyst from Shinhan Securities, pointed out that the market was also anticipating key economic reports, including the U.S. inflation index and the Bank of Korea's key rate decision later in the week. Among large-cap shares, Samsung Electronics and SK hynix showed significant increases, along with gains in the battery and automotive sectors. Battery leader LG Energy Solution and Samsung SDI saw modest gains, while Hyundai Motor and its affiliate Kia also rose. The shipbuilding and steel sectors, represented by Samsung Heavy Industries and POSCO Holdings, respectively, also experienced gains.
The South Korean won strengthened against the U.S. dollar, closing at 1,293.7 won. In the bond market, yields fell, with the yield on three-year Treasurys dropping 4.1 basis points to 3.648 percent and the five-year government bond yield decreasing 5.2 basis points to 3.670 percent. The market's reaction reflects a cautious optimism as investors weigh the implications of international developments and forthcoming economic data.