South Korean stocks rebounded more than 5% on Tuesday amid eased concerns over the U.S.-Iran conflict. U.S. President Donald Trump's remarks led to a sharp drop in global crude prices, spurring bargain hunting. The Korean won also strengthened significantly against the U.S. dollar.
South Korean stocks rebounded sharply on Tuesday following a steep decline the previous session, as investors sought bargains amid reduced concerns over the U.S.-Iran conflict. The Korea Composite Stock Price Index (KOSPI) rose 280.72 points, or 5.35 percent, to close at 5,532.59. Trading volume was robust at 913 million shares worth 28.4 trillion won ($19 billion), with 753 gainers outnumbering 146 losers. Individual investors net sold 1.8 trillion won, while foreigners net bought 1 trillion won and institutions purchased 847 billion won.
The rally followed reports that U.S. President Donald Trump described the war with Iran as 'very complete,' prompting a sharp fall in global crude prices. During the morning session, program trading on the main bourse was suspended for five minutes after the KOSPI 200 futures index moved more than 5 percent for at least one minute, triggering a sidecar mechanism by the Korea Exchange (KRX). Han Ji-young, a researcher at Kiwoom Securities, said, 'Seoul shares recouped earlier losses on expectations of easing war-related risks and a sharp decline in crude prices.' She added, 'The market is experiencing unprecedented volatility. Even if shares surge today, they could undergo a correction in the following session before shooting up again the day after.'
Samsung Electronics climbed 8.3 percent to 187,000 won, and SK hynix surged 12.2 percent to 938,000 won. Airlines advanced on lower oil prices, with Korean Air up 8.71 percent to 24,350 won and Asiana Airlines gaining 4.35 percent to 113,800 won. Defense stocks fell, including LIG Nex1 down 4.65 percent to 759,000 won and Hanwha Systems losing 4 percent to 156,200 won. Oil refiners were mixed: SK Innovation rose 1.35 percent to 119,800 won, while S-Oil dropped 8.39 percent to 117,900 won.
The Korean won traded at 1,469.3 against the U.S. dollar, up 26.2 won from the previous session. Bond prices rose, with the three-year Treasury yield falling 13.7 basis points to 3.283 percent and the five-year government bond yield declining 14.4 basis points to 3.508 percent.
