Seoul Shares Open Higher on Tech Gains Despite Renewed Hormuz Tensions
Key Takeaways
- •The KOSPI opened 1.09 percent higher at 6,365.07, rebounding from a 4.58 percent plunge in the prior session.
- •Samsung Electronics and SK hynix led morning gains with increases of 2.49 percent and 0.6 percent respectively, significantly influencing the broader index due to their substantial weight.
- •Iran reportedly intends to deny US and Israeli ships access to the Strait of Hormuz and is seeking compensation from countries it considers hostile before allowing passage.
- •South Korea imports nearly all of its crude oil with the majority sourced from the Middle East, making any disruption to the Strait of Hormuz critical for its energy costs and trade flows.
- •The Korean won traded at 1,424.70 against the US dollar, down 0.6 won from the previous session's close.
Seoul shares opened higher on Friday, led by gains in technology stocks, even as geopolitical tensions in the Middle East resurfaced amid uncertainty over the Strait of Hormuz.
The benchmark Korea Composite Stock Price Index (KOSPI) opened 68.69 points, or 1.09 percent, higher at 6,365.07. The rebound follows a sharp decline in the previous session, when the index plunged 4.58 percent, primarily dragged down by losses in technology stocks.
Overnight, U.S. stocks posted modest gains. The Dow Jones Industrial Average rose 0.85 percent, and the tech-heavy Nasdaq Composite climbed 0.06 percent, as investors weighed the lack of clarity surrounding a potential agreement between the United States and Iran to reopen the Strait of Hormuz.
The Strait of Hormuz, located between Oman and Iran, is one of the world's most critical oil transit chokepoints, through which roughly a fifth of global oil consumption passes daily. For South Korea, which imports nearly all of its crude oil and sources the majority from the Middle East, any disruption to the waterway carries outsized significance for energy costs and trade flows.
Iran reportedly plans to deny U.S. and Israeli ships access to the strategic waterway and is seeking compensation from countries it considers hostile before permitting them passage.
In Seoul, technology shares led the morning gains. Market bellwether Samsung Electronics, the world's largest memory chipmaker, rose 2.49 percent, while its semiconductor rival SK hynix climbed 0.6 percent. The two chipmakers together carry substantial weight in the KOSPI, meaning their movements heavily influence the broader index direction.
Leading steelmaker POSCO Holdings gained 2.51 percent, and Korea Aerospace Industries advanced 4.6 percent.
Among decliners, top automaker Hyundai Motor fell 1.94 percent, and state-run utility Korea Electric Power Corp. (KEPCO) dropped 1.81 percent.
The Korean won was trading at 1,424.70 won against the U.S. dollar as of 9:15 a.m., down 0.6 won from the previous session's stock market close.
Source: The Korea Times
