Seoul stocks close over 3% higher on chip rebound

Seoul stocks closed more than 3% higher on Tuesday, breaking a two-day losing streak as investors flocked to technology stocks amid optimism about the semiconductor sector. The Korea Composite Stock Price Index surged 231.68 points, or 3.56%, to end at 6,747.95. The rally came after the market initially weakened during early trading but rebounded strongly around midday, prompting the bourse operator to pause program trading for five minutes. The sharp rise followed a surge in demand for tech stocks, driven by investor speculation about the continued strength of the memory chip industry. Analysts noted that global investment banks had expressed a positive outlook on the sector, reinforcing confidence among traders. This sentiment was further bolstered by recent export figures, which showed a record high for July. Semiconductor exports grew by 180.6% compared to the same period last year, highlighting the resilience of South Korea’s key industries. Investor activity saw foreigners and institutional investors collectively purchasing 1.67 trillion won worth of shares, while retail investors sold a net 1.64 trillion won. Trade volume remained moderate, with approximately 387.8 million shares traded for a total value of 24.5 trillion won ($16.6 billion). More than twice as many stocks advanced than declined, with winners outnumbering losers 484 to 380. Major technology firms led the gains, with Samsung Electronics rising 6.15% to 259,000 won. Its competitor, SK hynix, also gained 4.08% to 1,836,000 won. Naver, the country’s leading portal operator, climbed 3.82% to 193,000 won following reports that its executives, including the company’s founder, were planning a visit to Brookfield’s headquarters in Canada. Industry observers suggested discussions would focus on financing options for Naver’s large-scale data centers and artificial intelligence facilities. In contrast, some sectors underperformed. Bio pharmaceutical company Celltrion fell slightly, closing down 0.5% to 171,600 won. Hyundai Motor ended flat at 399,000 won, while LG Energy Solution retreated 0.16% to 317,000 won. These declines reflected broader market conditions and sector-specific challenges, though they did not detract from the overall upward trend in the broader market. Meanwhile, the Korean won strengthened against the US dollar, closing at 1,473.4 won per dollar, up 5 won from the previous day. This movement indicated increased confidence in the economy, particularly as investors anticipated continued growth in key export industries. The market's performance was also influenced by geopolitical developments. Tehran announced receipt of new mediation efforts from Pakistan and Qatar aimed at resolving tensions with the United States. While this news did not directly impact stock prices, it contributed to a general sense of increased risk appetite among investors, further supporting the market's upward trajectory. As the week progresses, attention will remain focused on the ongoing performance of major tech firms and the potential implications of global economic trends on South Korea’s export-driven economy. Investors are likely to continue monitoring both domestic and international factors that could influence future market movements.