Seoul Shares Open Higher on Tech Rebound Amid Renewed Hormuz Tensions
Key Takeaways
- •The KOSPI rebounded 1.26 percent to 6,375.59 on Friday, recovering from a 4.58 percent drop in the previous session.
- •Samsung Electronics and SK hynix, the two largest KOSPI companies by market capitalization, rose 2.49 percent and 0.6 percent respectively.
- •Iran reportedly plans to deny Strait of Hormuz access to US and Israeli vessels and demand compensation from countries it considers hostile before allowing passage.
- •Hyundai Motor fell 1.94 percent and Korea Electric Power Corp. declined 1.81 percent, countering broader market gains.
- •The Korean won traded at 1,424.70 against the US dollar, remaining near the 1,400-won level last seen during 2022 global market stress.
South Korean equities opened higher on Friday, recovering from a sharp sell-off in the previous session, as technology stocks led broad-based gains despite escalating geopolitical tensions in the Middle East.
The benchmark Korea Composite Stock Price Index (KOSPI) opened 1.09 percent higher and continued to build momentum, trading up 79.21 points, or 1.26 percent, at 6,375.59 as of 9:15 a.m. The rebound follows a 4.58 percent plunge in the prior session, which was driven primarily by losses in technology shares.
Overnight in the United States, equity markets showed mixed performance. The Dow Jones Industrial Average rose 0.85 percent, while the tech-heavy Nasdaq Composite edged up 0.06 percent. Trading came amid uncertainty surrounding a potential agreement between the United States and Iran to reopen the Strait of Hormuz, a critical shipping route through which roughly one-fifth of global oil consumption transits. For South Korea, which sources the majority of its crude imports from the Middle East, disruptions to the waterway carry particular economic significance.
Iran reportedly intends to deny access to US and Israeli vessels through the strategic waterway and plans to demand compensation from countries it deems hostile before granting passage.
In Seoul, technology stocks led the market higher. Market bellwether Samsung Electronics rose 2.49 percent, while chipmaking rival SK hynix gained 0.6 percent. As the two largest companies by market capitalization on the KOSPI, their movements carry outsized weight on index direction. Leading steelmaker POSCO Holdings advanced 2.51 percent, and Korea Aerospace Industries climbed 4.6 percent.
On the declining side, top automaker Hyundai Motor fell 1.94 percent, and state-run utility Korea Electric Power Corp. retreated 1.81 percent.
In currency markets, the Korean won was trading at 1,424.70 won against the US dollar as of 9:15 a.m., down 0.6 won from the previous session's stock market close. The won has remained near the 1,400-won level in recent months, a range last tested during the 2022 global market stress. (Yonhap)
