Seoul Shares Jump 3% as AI Optimism Returns and Oil Prices Ease
Seoul's KOSPI closed up 3.09% at 5,638.34 on Tuesday, driven by chip stocks as renewed AI optimism and falling oil prices lifted sentiment; a buy-side sidecar was triggered and foreigners were net buyers.
Strong foreign buying pushed the index up fast enough for the Korea Exchange to activate a buy-side sidecar at 10:13 a.m., suspending buy orders in program trading for KOSPI-listed shares for five minutes. It was the first such action in four trading sessions. The measure is triggered when KOSPI 200 futures rise at least 5% and hold that level for a minute or longer.
The rally followed gains on Wall Street overnight, where the Dow Jones Industrial Average added 0.28%, the S&P 500 rose 0.7% and the Nasdaq Composite climbed 0.82%. Sentiment improved after AI startup Anthropic disclosed strong revenue growth in its U.S. initial public offering filing, reviving enthusiasm for AI-related stocks ahead of major technology earnings and the Federal Reserve's interest rate decision. Oil prices fell on hopes of easing Middle East tensions after reports of Qatari mediation efforts involving Iran and the United States.
Trade volume was light at 183.13 million shares worth 15.29 trillion won (US$11.55 billion), with advancers outnumbering decliners 593 to 274. Foreigners bought a net 592.97 billion won and institutions a net 280.38 billion won, while individuals sold a net 947.78 billion won.
"Foreigners and institutions snapped up major semiconductor stocks amid renewed investment sentiment over AI, despite lingering macroeconomic concerns," Lee Kyoung-min, an analyst at Daishin Securities, said.
Market bellwether Samsung Electronics gained 4.23% to 222,000 won, and chipmaker SK hynix rose 5.18% to 1.34 million won. SK Square, the parent firm of SK hynix, jumped 7.67% to 828,000 won, and Samsung Electro-Mechanics, an electronics component affiliate of Samsung Electronics, surged 7.42% to 1.2 million won.
Reports from Yonhap differed on the won's direction. An earlier version said the currency strengthened against the dollar, while a later report said it weakened, trading at 1,323.7 won per dollar at 3:30 p.m., down 0.6 won from the previous stock session's close. Another updated version gave the same level but said the won was up 2.3 won. Bond prices, which move inversely to yields, closed higher, with the three-year Treasury yield down 3.1 basis points at 3.758% and the five-year government bond yield down 3.3 basis points at 3.899%.