Seoul stocks experienced a significant surge on Wednesday, driven by robust gains in chipmakers and other leading technology stocks. Market optimism was fueled by growing hopes for a potential resolution to the US-Iran conflict.
The Korean won saw a notable strengthening against the dollar, closing at 1,501.3 won per dollar, a significant increase of 28.8 won from the previous session’s rate of 1,530.1.
The benchmark Korea Composite Stock Price Index (KOSPI) soared by 426.24 points, a substantial 8.44 percent increase, closing at 5,478.7. This surge effectively ended a four-day losing streak for the index.
Wednesday’s impressive gains marked the second-largest single-day increase in the history of the KOSPI. The most significant gain was recorded on March 5, when the index jumped by 490.36 points.
Trading volume was moderate, with 942.93 million shares changing hands, valued at 27.31 trillion won ($18.19 billion). The market breadth was overwhelmingly positive, with 837 stocks advancing and only 70 declining.
Foreign investors and retail investors engaged in net selling, offloading 612.61 billion won and 3.76 trillion won worth of shares, respectively. Conversely, institutional investors were strong buyers, purchasing a net 4.03 trillion won worth of shares.
Following overnight gains on Wall Street, the KOSPI opened nearly 5.5 percent higher and continued its upward trajectory, bolstered by strong institutional buying activity.
The Korea Exchange (KRX), the primary stock exchange operator in South Korea, implemented a five-minute buy-side sidecar approximately seven minutes after the market opened. This measure temporarily halted program-driven buy orders in KOSPI futures.
A similar buy-side sidecar was also triggered in the tech-heavy Korea Securities Dealers Automated Quotation (KOSDAQ) market. The KOSDAQ index closed at 1,116.18, reflecting a 6.06 percent increase on Wednesday.
The market rally was spurred by comments from US President Donald Trump on Tuesday (US time), suggesting that the United States could potentially conclude its military operation against Iran within “two or three weeks.” He added, “All I have to do is leave Iran.”
Adding to the positive sentiment, Iranian President Masoud Pezeshkian reportedly told European Council President Antonio Costa that Tehran possesses the “necessary will” to end the war, provided its adversaries offer guarantees that it will not reignite. This information was reported by various foreign media outlets.
The conflict, which commenced in late February following U.S.-Israeli strikes on Iran, has led to increased global oil prices due to supply disruptions. This has caused turbulence in financial markets and heightened concerns regarding inflation and a potential economic slowdown.
“The KOSPI experienced a 19.1 percent decline from its recent peak in the first week of March and has the potential to fall further. However, corporate earnings remain robust, indicating that the stock market is capable of rebounding even after a significant shock,” stated a monthly outlook report by KB Securities.
Increased optimism surrounding South Korea’s potential inclusion in the World Government Bond Index (WGBI) also contributed to improved investor sentiment.
Following its inclusion in the major global bond index managed by Britain-based index provider FTSE Russell, significant inflows of foreign funds tracking the WGBI are anticipated to enter the local market in phases over an eight-month period, concluding in November.
Large-cap technology shares were at the forefront of the market’s positive performance.
Market leader Samsung Electronics saw a substantial surge of 13.4 percent, reaching 189,600 won per share. Its rival in the chip manufacturing sector, SK hynix, also experienced significant gains, soaring 10.66 percent to 893,000 won per share.
Leading automaker Hyundai Motor jumped 9.54 percent to 488,000 won, while its sister company, Kia, advanced 6.96 percent to 155,300 won.
Top battery manufacturer LG Energy Solution rose 3.17 percent to 407,000 won, and major steel producer POSCO increased 4.06 percent to 346,000 won.
Biopharmaceutical giant Samsung Biologics climbed 4.52 percent to 1,572,000 won, and Celltrion went up 4.46 percent to 206,000 won.
Defense industry leader Hanwha Aerospace spiked 6.73 percent to 1,333,000 won, and nuclear power plant builder Doosan Enerbility soared 8.5 percent to 99,600 won. Major financial group KB Financial grew 4.51 percent to 148,300 won.
