Kospi soars to 2025 high amid waning geopolitical fears
South Korea's benchmark stock index soared Tuesday, reaching a new yearly high during intraday trading, as the market breathed a sigh of relief amid easing fears of an immediate escalation in Middle East tensions. 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 in over 3 1/2 years, since September 2021. As of 2 p.m., the index stood at 3,095.94, up 81.47 points, or 2.7 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. and hovering around that level as of press time.
As of 2 p.m., offshore investors were net buyers of Kospi shares worth 335.1 billion won ($245.7 million), while institutional investors bought 250.9 billion won. Retail investors were the sole net sellers, offloading 546 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 3.62 percent, while chipmaking rival SK hynix jumped 7.13 percent as of 2 p.m. SK hynix's market cap climbed to a record high of 203.11 trillion won, surpassing the 200 trillion won mark for the first time — an 80 trillion won increase from 126.6 trillion won in late 2023.
Bio stocks also performed well, with Samsung Biologics up 0.81 percent and Celltrion gaining 1.87 percent. Leading battery maker LG Energy Solution advanced 0.81 percent, while KB Financial Group jumped 3.81 percent.
Amid the bullish momentum, the secondary Kosdaq index also surpassed the 800-point threshold, reaching as high as 801.25 during intraday trading. It was the first time the tech-heavy index hit the milestone in 11 months, since August 2024.
'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 1,364.34 per dollar as of 2 p.m., appreciating more than 17 won from the previous after-hours session's close.
On Monday, the won had weakened to the 1,380 level against the dollar, as investors sought safe-haven assets amid geopolitical risks.
The won opened Tuesday at 1,369 per dollar and continued to trade around that level through the afternoon.
The US dollar index, a key gauge of the greenback's strength, also retreated to the mid-97 range, 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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