Seoul: South Korean stocks rose nearly 3 percent Tuesday, edging closer to the 6,000-point threshold on optimism over potential renewed negotiations between Washington and Tehran. The local currency also experienced a significant gain against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) increased by 159.13 points, or 2.74 percent, closing at 5,967.75. The index had briefly surpassed the 6,000-point mark, reaching as high as 6,026.52, a level not seen since March 3 following U.S. and Israeli air strikes on Iran on February 28.
Trading volume was moderate with 881.9 billion shares valued at 26.7 trillion won (US$18 billion) exchanging hands. Gainers outpaced losers by 669 to 197. Foreign and institutional investors were net buyers, purchasing 830 billion won and 1.25 trillion won, respectively, while individual investors sold a net 2.4 trillion won.
The U.S. military initiated a blockade of the Strait of Hormuz on Monday after talks between Washington and Tehran in Islamabad, Pakistan, broke down over the weekend. However, U.S. President Donald Trump suggested Iran is seeking a deal, fueling investor optimism. "Investors anticipate a second round of peace talks between the U.S. and Iran after Trump's comments," remarked Kang Jin-hyuk, an analyst at Kyobo Securities. "The Wall Street Journal also reported that the two sides have exchanged detailed terms on uranium enrichment, raising further hopes for a deal."
The stock market rally was led by the tech and financial sectors. Samsung Electronics saw a 2.74 percent increase to 206,500 won, and SK hynix surged 6.06 percent to 1.1 million won ahead of its upcoming first-quarter earnings report.
In the financial sector, Hana Financial Group rose 0.67 percent to 120,800 won, while Samsung Fire and Marine Insurance climbed 3.82 percent to 489,500 won. Automotive leader Hyundai Motor advanced 2.72 percent to 491,500 won, and major game developer NC increased 3.97 percent to 248,500 won.
Leading mobile carrier SK Telecom gained 3.24 percent to 95,500 won, with retail giant Shinsegae also up 1.02 percent to 346,500 won. Conversely, defense stocks saw declines; Hanwha Aerospace decreased by 0.46 percent to 1.52 million won, and LIG DandA, previously LIG Nex1, fell 0.53 percent to 934,000 won.
The local currency was quoted at 1,481.2 won against the U.S. dollar as of 3:30 p.m., marking an 8.1 won increase from the previous session. In the bond market, prices rose, causing yields to fall. The yield on three-year Treasurys decreased by 4.3 basis points to 3.339 percent, while the return on five-year government bonds dropped by 3.5 basis points to 3.519 percent.