South Korea Shares Reach Three-Month High Amid Tariff Exemption Hopes

On Thursday, Korean shares climbed to their highest point in nearly three months. This surge was primarily driven by positive performance in the technology and automotive sectors, as expectations grew for potential exemptions from U.S. tariffs.

The benchmark Korea Composite Stock Price Index, known as KOSPI, rose by 34.78 points, or 1.36 percent, closing at 2,583.17. This upward trend marked the third consecutive winning session and the best closing since November 4, 2024, when it reached 2,588.97.

Trading activity was robust, with around 669.19 million shares exchanged, valued at approximately 16.82 trillion won (about $11.61 billion). In this trading session, the number of advancing stocks outperformed those that declined, with 571 shares rising against 309 falling.

Institutional investors notably purchased a net 656.27 billion won worth of shares. In contrast, foreign and retail investors sold net amounts of 102.86 billion won and 601.93 billion won in shares, respectively.

The KOSPI opened on a strong note and continued to climb, despite the release of U.S. economic data indicating persistent inflation, which has led to market speculation about a possible delay in interest rate cuts by the Federal Reserve.

The investor sentiment was positively influenced by comments from U.S. House of Representatives Speaker Mike Johnson, who expressed belief that President Donald Trump is considering exemptions for reciprocal tariffs, particularly affecting the auto and pharmaceutical industries. Additionally, the ongoing discussions between Trump and Russian President Vladimir Putin regarding the conflict in Ukraine have drawn attention.

In Seoul's market, technology and automotive stocks were the primary contributors to the KOSPI's advance. Major firm Samsung Electronics saw a gain of 0.18 percent, trading at 55,900 won, while chip manufacturer SK Hynix experienced a significant increase of 1.81 percent, reaching 202,500 won.

Leading electric vehicle battery maker LG Energy Solution surged 3.1 percent, trading at 349,000 won. Furthermore, South Korea's largest automaker, Hyundai Motor, experienced a robust rise of 4.24 percent, closing at 206,500 won, while its affiliate Kia increased by 3.27 percent, trading at 94,700 won.

POSCO Holdings, the leading steelmaker, also saw a rebound, rising 4.34 percent to 240,500 won after facing recent losses. However, the biopharmaceutical sector witnessed mixed results. Samsung Biologics, a top biopharmaceutical company, gained 1.3 percent to 1,172,000 won, while Celltrion saw a slight loss of 0.11 percent, closing at 178,500 won.

Among some of the decliners, prominent portal operator Naver experienced a 2 percent drop to 220,500 won, and Kakao, which runs South Korea's leading mobile messenger, plummeted by 3.81 percent to 40,400 won.

The South Korean won also appreciated against the U.S. dollar, closing at 1,447.5 won per dollar, an increase of 5.9 won from the previous trading day.

In the bond market, prices closed higher, resulting in lower yields. The yield on three-year government bonds decreased by 2 basis points to 2.631 percent, while the yield on five-year government bonds fell by 1.2 basis points, ending at 2.732 percent.

stocks, KOSPI, tariffs, technology, market