South Korean Stock Market Soars: Kospi Nears 7,000 Amid Tech Rally and Geopolitical Hopes
The South Korean stock market experienced a robust surge on Monday, with the benchmark Korea Composite Stock Price Index (KOSPI) climbing over 5 percent to reach a new record high. This remarkable performance, driven by significant investor interest in semiconductor shares and optimism surrounding potential US-Iran peace talks, saw the KOSPI nearing the psychological 7,000-point threshold. Concurrently, the Korean won strengthened considerably against the US dollar.
The KOSPI, Korea’s leading stock market index, closed up an impressive 338.12 points, or 5.12 percent, settling at an unprecedented 6,936.99.
Trading activity was exceptionally vigorous, with a volume of 864.3 million shares exchanged, valued at 41.3 trillion won (approximately $28.2 billion). Despite the overall market rally, decliners slightly outnumbered advancers, with 473 losers against 392 winners.
Key to the market’s upward momentum was substantial buying from foreign and institutional investors. Foreigners injected 3 trillion won into local shares, while institutions added a net 1.9 trillion won. In contrast, retail investors net-sold shares totaling 4.8 trillion won.
The KOSPI opened strong, rising 2.79 percent following an announcement by US President Donald Trump regarding a “humanitarian gesture” to guide ships through the Strait of Hormuz, unrelated to the ongoing Iran conflict. However, geopolitical tensions briefly surfaced as a senior Iranian official later cautioned that any US intervention in the strait would be perceived as a breach of ceasefire.
Despite these initial geopolitical jitters, the KOSPI sustained and expanded its gains throughout the afternoon trading session, largely bolstered by continued foreign and institutional purchasing.
Lee Kyung-min, an analyst at Daishin Securities, attributed the strong performance to multiple factors. “Tech shares received a significant boost from positive movements on Wall Street over the weekend,” Lee explained. “Furthermore, foreign investors strategically increased their net purchases ahead of the market’s closure for Children’s Day on Tuesday, anticipating further upward trends.”
The KOSPI has demonstrated remarkable resilience and growth, surpassing the 5,000-point mark in late January and subsequently crossing the 6,000-point level in February. After fully recovering from losses incurred in March following the late February outbreak of the US-Iran war, the index is now on a trajectory towards the unprecedented 7,000-point level, fueled by persistent optimism around the burgeoning AI boom and renewed hopes for the unhindered flow of global trade through the key waterway.
The semiconductor sector undeniably spearheaded Monday’s impressive rally, showcasing robust investor confidence.
Industry leader Samsung Electronics saw its shares jump by 5.44 percent to 232,500 won. Its fierce chipmaking competitor, SK hynix, posted an even more dramatic surge of 12.52 percent, reaching a new all-time high of 1.4 million won and achieving a market capitalization exceeding 10 trillion won for the very first time.
Other key players in the chip ecosystem also performed strongly: Hanmi Semiconductor, a vital chip equipment manufacturer, gained 2.72 percent to 378,000 won, while Samsung Electro-Mechanics, an electronic components affiliate of Samsung Electronics Co., soared by 10.34 percent to 918,000 won.
Beyond semiconductors, defense sector shares also showed strength. Industry giant Hanwha Aerospace advanced 3.39 percent to 1.4 million won, and LIG D&A climbed 4.46 percent to 983,000 won.
The automotive sector’s top player, Hyundai Motor, saw a 1.51 percent increase to 539,000 won, and leading battery manufacturer LG Energy Solution rose 2.5 percent to 472,000 won.
Conversely, the biotechnology sector experienced a downturn, with Celltrion shares falling 1.35 percent to 197,800 won, and Samsung Biologics dropping 2.58 percent to 1.4 million won.
In currency markets, the Korean won closed significantly stronger against the US dollar, trading at 1,462.8 won by 3:30 p.m., marking a gain of 20.5 won from the previous trading session.
