Seoul shares surged more than 6 percent on Wednesday, driven by significant gains in major technology stocks. This robust performance occurred despite persistent geopolitical tensions in the Middle East, which remained a key concern for global investors. The Korean won also strengthened against the US dollar, reflecting improved market sentiment.
The benchmark Korea Composite Stock Price Index (KOSPI) opened 3.3 percent higher and steadily extended its advance throughout the day. The KOSPI ultimately closed at 7,284.41, marking a substantial increase of 427.58 points, or 6.24 percent, from the previous trading session.
The uplift in South Korean equities followed Tuesday’s release of softer-than-expected US inflation data. This positive economic news boosted Wall Street overnight and significantly eased investor concerns regarding potential near-term interest rate hikes by the Federal Reserve, providing a global tailwind for stock markets.
“The softer-than-expected US consumer price index data was crucial in alleviating inflation concerns, which had recently intensified due to the ongoing conflict in the Middle East,” explained Lim Jung-eun, an analyst at KB Research, highlighting the interplay of global economic and geopolitical factors.
Recent escalating tensions between the United States and Iran, marked by renewed exchanges of strikes over the critical Strait of Hormuz, have caused upward pressure on international oil prices, adding a layer of complexity to market dynamics.
In the US market overnight, the Dow Jones Industrial Average saw a marginal gain of 0.02 percent, while the tech-centric Nasdaq composite index recorded a more significant rise of 0.9 percent, setting a positive tone for Asian markets.
Investor activity in Seoul showed strong buying from institutional and foreign investors. Institutions acquired a net 182.68 billion won ($123 million) worth of shares, while foreign investors made substantial purchases totaling 2.32 trillion won. Conversely, retail investors were net sellers, offloading 2.47 trillion won in shares.
Technology stocks were at the forefront of the market’s rally in Seoul.
Market bellwether Samsung Electronics saw its shares jump by 6.27 percent, closing at 279,500 won. Rival chipmaker SK Hynix also experienced a sharp ascent, surging 8.83 percent to 2,082,000 won, underscoring the strong performance of Korea’s semiconductor sector.
Beyond tech, other key South Korean industries also posted gains. Leading automaker Hyundai Motor rose 2.24 percent to 434,000 won. Defense company Hanwha Aerospace climbed 6.54 percent to 929,000 won, and steel industry giant POSCO Holdings gained 3.62 percent, reaching 314,500 won.
However, not all sectors participated in the broad rally. State-run utility Korea Electric Power Corp. saw a slight dip of 0.15 percent to 33,900 won. Discount store chain Emart also slipped, falling 1.52 percent to 79,400 won.
