Seoul shares extend gains late Wed. morning amid Hormuz hopes, easing AI concerns

SEOUL, Aug. 5 (Yonhap) -- In late Wednesday morning trading, Seoul shares surged, buoyed by eased worries about artificial intelligence profitability and optimism surrounding a potential interim deal between the United States and Iran regarding the Strait of Hormuz. The Korea Composite Stock Price Index (KOSPI) opened 3.85 percent higher, ultimately climbing 249.33 points, or 3.92 percent, to reach 6,608.28 by 11:20 a.m. On Tuesday, the index had dipped 5.12 percent following a 5.12 percent decline the previous day.

In response to the KOSPI's sharp rise, the Korea Exchange (KRX) activated a buy-side sidecar for five minutes at 9:25 a.m. Overnight, U.S. stocks experienced a boost as investors anticipated the reopening of the vital shipping route, which could result in lower oil prices and reduced inflationary pressure. Strong quarterly earnings from major firms, such as enterprise software company Palantir Technologies, further alleviated concerns over excessive investment in the AI sector by prominent technology companies.

The Dow Jones Industrial Average increased 1.71 percent to 54,085.88, while the tech-heavy Nasdaq Composite surged 2.59 percent to 26,584.99. Both large-scale investors and foreign investors collectively bought a combined 370.8 billion won (US$260 million) and 427.7 billion won worth of shares, respectively, whereas retail investors sold a net 795.5 billion won.

Notable market movers included Samsung Electronics, which rose 2.71 percent, and its rival chipmaker SK hynix, which climbed 5.71 percent. Among the decliners, major refiner SK Innovation slipped 1.62 percent, and national carrier Korean Air fell 1.35 percent.