Korean stocks surge over 4% as risk appetite returns

South Korean stocks experienced a significant surge of over 4% on Tuesday, with market optimism bolstered by easing tensions in the Middle East and a strong overnight rally in U.S. semiconductor shares. By the close of trading, the benchmark index had risen to 5,239.13, marking a 4.39% increase from its opening level, which had already surged by 4.55%. Early trading saw some of these gains reversed, but a renewed influx of buying interest quickly restored momentum.

Investors from abroad turned net buyers for the first time in eight consecutive trading sessions, accumulating a net 353.2 billion won ($264.3 million) worth of shares. Institutional investors also played a role, buying a net 498 billion won in stocks, while retail investors sold a net 1.34 trillion won worth of shares.

The semiconductor sector was a key driver of the index's rise, with SK hynix shares surging 6.69% to close at 1,212,000 won and Samsung Electronics climbing 4.74% to 198,900 won. Additionally, power equipment shares benefited from improving sentiment surrounding the artificial intelligence (AI) value chain, with Hyosung Heavy Industries, HD Hyundai Electric, and LS Electric all posting notable gains of 12.72%, 10.67%, and 8.33% respectively.