Key facts
- The KOSPI index closed at 8,864.24, up 1.58% on the day.
- Semiconductor stocks, including Samsung Electronics and SK Hynix, drove the index higher.
- SK Hynix reached a new record high.
- Shipbuilding stocks also saw gains amid anticipation of a new South Korea-U.S. investment firm.
- Foreign investors were net sellers, while retail and institutional investors were net buyers.
- Bond yields declined.
South Korean stocks reached a new high on Wednesday, extending a winning streak to five consecutive sessions, primarily driven by a rally in the semiconductor sector. The benchmark Korea Composite Stock Price Index (KOSPI) closed up 1.58 percent at 8,864.24, nearing the 9,000-point mark.
Buying pressure from retail and institutional investors, who collectively purchased 1.1 trillion won (US$727.3 million), fueled the index's rise after an initial lower opening. Foreign investors, however, offloaded a net 992.3 billion won.
Market sentiment was influenced by a combination of risk-on appetite following a peace agreement between the U.S. and Iran, and a cautious wait-and-see approach ahead of the U.S. Federal Reserve's policy meeting. Analysts widely expect the Fed to hold interest rates steady, given easing inflationary pressures from lower oil prices.
Further support for the market came from anticipation surrounding the launch of a new state-run company tasked with implementing South Korea's US$350 billion investment pledge to the United States. This initiative is expected to boost sectors such as shipbuilding, chips, and nuclear power plants.
Market heavyweights showed mixed performance. Semiconductor giants Samsung Electronics rose 1.02 percent, and SK Hynix surged 5.84 percent to a new record high. The shipbuilding sector also saw gains, with Hanwha Ocean up 3.02 percent and HD Hyundai Heavy Industries up 1.29 percent. Conversely, top automaker Hyundai Motor fell 3.44 percent, and financial firm KB Financial declined 4.65 percent.
In currency markets, the Korean won weakened slightly against the U.S. dollar, trading at 1,513.4 won per dollar. Bond prices rose, pushing yields lower, with the three-year Treasury yield falling 0.7 basis point to 3.710 percent and the five-year government bond yield down 0.8 basis point to 3.897 percent.