South Korean stocks experienced a significant rebound of over 5% on Tuesday, recovering from a sharp decline in the previous session. This surge was driven by investors seeking bargain opportunities amidst diminishing concerns regarding the potential for escalation in the US-Iran conflict. Simultaneously, the South Korean currency saw a notable appreciation against the US dollar.
The Korea Composite Stock Price Index (KOSPI) climbed by 280.72 points, a 5.35% increase, ultimately closing at 5,532.59.
Trading volume was robust, with 913 million shares changing hands, representing a value of 28.4 trillion won ($19 billion). Gainers significantly outnumbered losers, with a ratio of 753 to 146.
Individual investors engaged in net selling of 1.8 trillion won, while foreign investors were net buyers, purchasing 1 trillion won worth of shares. Institutions also contributed to the buying pressure, with net purchases of 847 billion won.
The strong gains followed a dip of nearly 6% in the previous session, triggered by news reports indicating US President Donald Trump’s statement that the war with Iran was “very complete,” which led to a sharp decline in global crude oil prices. Investors seized the opportunity to acquire undervalued assets.
During the morning session, program trading on the main stock exchange was temporarily suspended for five minutes. This suspension, known as a sidecar, is activated by the Korea Exchange when the KOSPI 200 futures index fluctuates by 5% or more for at least one minute.
“Seoul shares recouped earlier losses on expectations of easing war-related risks and a sharp decline in crude prices,” stated Han Ji-young, a researcher at Kiwoom Securities.
“The market is experiencing unprecedented volatility. Even if shares surge today, they could undergo a correction in the following session before shooting up again the day after,” Han added, highlighting the unpredictable nature of the current market.
Leading market capitalization stock, Samsung Electronics, increased by 8.3% to 187,000 won, while SK hynix soared by 12.2% to 938,000 won.
Airline stocks also benefited from the falling crude oil prices, with Korean Air rising by 8.71% to 24,350 won and Asiana Airlines adding 4.35% to 113,800 won.
Oil refiners exhibited mixed performance, with SK Innovation gaining 1.35% to 119,800 won, while S-Oil declined by 8.39% to 117,900 won.
Defense stocks closed lower, with LIG Nex1 plunging 4.65% to 759,000 won and Hanwha Systems losing 4% to 156,200 won.
