(LEAD) Seoul shares surge 3 pct on renewed AI optimism, easing oil prices

SEOUL, Oct. 27 (Yonhap) -- The Korean stock market saw a significant surge on Tuesday, driven by renewed optimism surrounding artificial intelligence (AI) and a decrease in oil prices, which buoyed overall market sentiment. The Korea Composite Stock Price Index (KOSPI) rose by 3.09 percent, closing at 5,638.34, marking a gain of 168.87 points from the previous trading session.

This rise in the KOSPI can be attributed to substantial foreign investments, which led to the activation of a buy-side sidecar mechanism at 10:13 a.m., suspending buy orders in program trading for KOSPI-listed shares for a brief period. This move was unprecedented in the past four trading sessions and underscored the market's heightened risk appetite.

Wall Street experienced a modest gain overnight, with the Dow Jones Industrial Average increasing by 0.28 percent, the S&P 500 climbing by 0.7 percent, and the Nasdaq Composite advancing by 0.82 percent. Such positive developments came after AI startup Anthropic disclosed strong revenue growth in its U.S. initial public offering (IPO) filing, reigniting investor enthusiasm for AI-related stocks.

The improvement in investor sentiment was further catalyzed by a decline in oil prices, attributed to hopes of easing tensions in the Middle East following Qatar's mediation efforts between Iran and the United States. Despite light trade volumes, with 183.13 million shares worth 15.29 trillion won ($11.55 billion) transacted, the market witnessed a strong performance from foreign and institutional investors, who collectively bought a net of 592.97 billion won and 280.38 billion won, respectively.

Meanwhile, individual investors sold a net of 947.78 billion won. Market analysts noted that foreign and institutional investors were particularly drawn to major semiconductor stocks, despite ongoing macroeconomic concerns. Samsung Electronics and SK hynix, both key players in the semiconductor industry, witnessed significant gains, with Samsung Electronics rising by 4.23 percent to 222,000 won and SK hynix increasing by 5.18 percent to 1.34 million won.

The Korean won also strengthened against the U.S. dollar, trading at 1,323.7 won per dollar, up 2.3 won from the previous session's close.