Seoul shares spike over 4.6 pct on renewed AI optimism

South Korean shares climbed 4.6% to a five-week peak on Monday, driven by optimism around OpenAI's groundbreaking new AI model. The Korea Composite Stock Price Index (KOSPI) soared 4.61% to close at 6,995.39, marking its highest finish since July 23. US$16 billion worth of shares changed hands, with gains outweighing losses 476 to 380. Foreign and institutional investors boosted the index by buying a combined 4.69 trillion won, while retail investors sold 6.83 trillion won.

The rally began with the launch of OpenAI's GPT-6 Astra, which analysts believe could usher in the era of artificial general intelligence (AGI). The index's surge came despite lower-than-expected gains from major U.S. tech and software companies. Memory chip demand is expected to rise as a result of the new model.

Semiconductor shares led the market gains, with Samsung Electronics and SK hynix both posting strong increases. Other notable winners included Hanmi Semiconductor and SK Square, the parent company of SK hynix. Automotive shares also benefited, with Hyundai Motor and its auto parts affiliate Hyundai Mobis both climbing. Bank shares were generally positive, with Hana Financial Group and Shinhan Financial Group both posting gains.

The Korean won strengthened against the US dollar, closing at 1,340.5 won, up 9.9 won from the previous trading session. Bond prices fell, with yields on three-year and five-year government bonds both rising.