Seoul shares spike 3.5 pct on eased woes over Strait of Hormuz, AI

Seoul shares experienced a significant surge of over 3.5% on Wednesday, driven by reduced worries about the profitability of artificial intelligence (AI) investments and the possibility of a US-Iran interim agreement concerning the Strait of Hormuz. The Korea Composite Stock Price Index (KOSPI) surged by 3.76%, or 239.31 points, reaching a closing value of 6,598.26.

This marked a notable increase from its previous day's intraday high of 6,674.66, and a 1.62% rise from Tuesday's close of 6,492.78. In response to the sharp KOSPI surge, the Korea Exchange activated a buy-side sidecar for the index for five minutes at 9:25 a.m. On Tuesday, the index had previously climbed 1.62% following a 5.12% drop the day before.

Overnight in the U.S., stocks saw an uptick as investors anticipated that a potential agreement to re-open the Strait of Hormuz could help lower oil prices and curb inflationary pressures. Strong quarterly earnings from major firms, particularly enterprise software giant Palantir Technologies, contributed to easing concerns about substantial investments in the AI sector by key technology companies.

The Dow Jones Industrial Average climbed 1.71% to 54,085.88, while the tech-focused Nasdaq Composite gained 2.59% to 26,584.99.