Kospi soars over 3,100 amid waning geopolitical fears
Chip stocks rally, with SK hynix market cap topping W200tr for first time
South Korea's benchmark stock index soared past 3,100 points to a new yearly high Tuesday, amid easing fears over conflict in the Middle East. The Korean won also strengthened against the US dollar.
Following US President Donald Trump's announcement that Iran and Israel had agreed to a ceasefire, the Kospi posted solid gains, surpassing the 3,100-point threshold for the first time since September 2021. The index closed at 3,103.64, up 89.17 points or 2.96 percent from the previous session.
The Kospi opened at 3,061.14, tracking overnight gains on Wall Street. Although it briefly dipped, the index soon regained strength, hitting the 3,100 mark at around 12:20 p.m. With the market buoyant, the Kospi hit as high as 3,105.04 during intraday trading.
Offshore investors were net buyers of Kospi shares worth 431.8 billion won ($315 million), while institutional investors bought 259.3 billion won. Retail investors were the sole net sellers, offloading 638.4 billion won worth of stocks to lock in profits.
The Kospi has maintained a near-uninterrupted rally since June 2, driven by renewed foreign inflows and pro-growth optimism that have buoyed investor sentiment across the board.
Blue-chip stocks surged during intraday trading. Tech giant Samsung Electronics rose 4.31 percent, while chipmaking rival SK hynix jumped 7.32 percent. SK hynix's market cap climbed to a record high of 202.74 trillion won as of closing, surpassing the 200 trillion won mark for the first time — a nearly 80 trillion won increase from 126.6 trillion won in late 2023.
Bio stocks also performed well, with Samsung Biologics up 1.21 percent and Celltrion gaining 1.38 percent. Leading battery maker LG Energy Solution advanced 2.21 percent, while KB Financial Group jumped 4.37 percent.
Amid the bullish momentum, the secondary Kosdaq index also surpassed the 800-point threshold, reaching as high as 801.34 during intraday trading. It was the first time the tech-heavy index crossed the 800 mark since August 2024. It eventually wrapped up trading at 800.93.
'The uncertainty triggered by the Middle East tensions has eased in the stock market,' said Kiwoom Securities analyst Han Ji-young.
'From a supply-demand perspective, a key factor going forward will be whether foreign investors, who have driven the Kospi rally with net purchases of nearly 5 trillion won since June, begin to take profits.'
As demand for the safe-haven dollar subsided, the Korean won gained ground. The won was quoted at 1360.2 per dollar as of daytime trading closing, appreciating by 24.1 won from the previous session. It was the sharpest gain of the won per dollar since the 25.7 won gain on May 15.
The rebound comes only a day after the won had weakened to the 1,380 level against the dollar on Monday as investors sought safe-haven assets amid geopolitical risks.
The US dollar index, a key gauge of the greenback's strength, also retreated to the mid-97 range after hitting the early-99 level, reversing much of the previous risk-off sentiment and returning to levels seen a week earlier, before Israel-Iran tensions began to escalate.
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