Seoul stocks rise 1.65 pct on chip gains despite Middle East tensions

Seoul stocks increased by 1.65 percent on Monday, driven by strong performance in the semiconductor sector despite continued tensions in the Middle East and higher oil prices. The Korean won strengthened against the US dollar, reaching 1,381 won per dollar. The Korea Composite Stock Price Index (KOSPI) climbed 113.49 points, or 1.65 percent, to 7,007.72, marking its third consecutive day of gains.

The rally was fueled by investor optimism towards artificial intelligence (AI) and semiconductor stocks, as improved sentiment contributed to the positive outlook on these sectors. However, concerns remained over elevated crude oil prices, with Brent crude oil trading above US$100 a barrel due to sustained inflationary pressures and geopolitical risks in the Middle East.

Trading volume was relatively light, with 232.76 million shares exchanged, valued at 19.69 trillion won (US$14.26 billion). The decline in market activity was evident, as there were more decliners than advancers, with 550 shares falling compared to 310 that rose. Institutional investors contributed to the net buying of shares, amounting to a net purchase of 1.49 trillion won.

Foreign investors sold shares worth 2.98 trillion won, while domestic investors sold shares valued at 181.89 billion won. The market sentiment towards AI-related stocks remained positive, driven by the expectation of continued high demand, which contributed to the gains in semiconductor shares. Key players in the semiconductor industry, such as Samsung Electronics and SK hynix, experienced significant gains.

Samsung Electronics rose 4.98 percent to 274,000 won, while SK hynix, a chip rival, increased by 0.59 percent to 1.87 million won. SK Square, the parent company of SK hynix, saw a surge of 4.45 percent to 1.12 million won. However, the performance of other major companies varied. Hyundai Motor, a leading automaker, declined by 1.64 percent to 359,000 won, while battery manufacturer LG Energy Solution dropped by 3.3 percent to 352,000 won.