Seoul: Seoul stocks closed sharply higher on Tuesday amid hopes that the U.S.-Iran war may end soon. The Korean won sharply strengthened against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) closed up 148.18 points, or 2.74 percent, to 5,553.92, after reaching as high as 5,643.00. On Monday, the index had plunged by more than 6 percent due to escalating tensions in the Middle East.
Trade volume was moderate at 1.2 billion shares worth 24.5 trillion won (US$16.39 billion), with winners outnumbering losers 705 to 190. Foreign investors were net sellers, offloading 2 trillion won, while institutional and retail investors purchased a combined net 1.7 trillion won.
"The stock market surged on Trump's TACO but reduced gains amid persisting geopolitical uncertainties," Lee Kyoung-min, an analyst from Daishin Securities, stated. Earlier, Trump had threatened to hit Iranian power plants if Tehran did not reopen the Strait of Hormuz by Monday evening. However, he later announced a postponement of this plan, mentioning that the United States is having "good talks" with Iran.
Investors remained cautious over persisting geopolitical uncertainties, as Iran denied having talks with the U.S., and the strait, a critical oil waterway, remains effectively closed, Lee added.
Most market heavyweights closed higher. Chip giant Samsung Electronics added 1.44 percent to 189,700 won, and its rival SK hynix surged 5.68 percent to 986,000 won. Top carmaker Hyundai Motor advanced 1.44 percent to 492,000 won, battery maker LG Energy Solution jumped 10.25 percent to 392,500 won, and defense giant Hanwha Aerospace rose 4.46 percent to 1,335,000 won.
Among the decliners were nuclear power plant builder Doosan Enerbility, which fell 0.6 percent to 100,100 won, and brokerage Mirae Asset Securities, which declined 1.29 percent to 61,100 won.
The local currency was quoted at 1,495.2 won against the U.S. dollar as of 3:30 p.m., up 22.1 won from the previous session. Bond prices, which move inversely to yields, closed sharply higher. The yield on three-year Treasurys fell 9.4 basis points to 3.523 percent, and the return on the benchmark five-year government bonds retreated 8.2 basis points to 3.755 percent.