Seoul: South Korean stocks closed slightly higher Tuesday thanks to gains in big-cap tech and auto shares amid persisting military tensions in the Middle East. The local currency was trading slightly higher against the U.S. dollar. The benchmark Korea Composite Stock Price Index (KOSPI) added 3.64 points, or 0.12 percent, to end at 2,950.3, one day after it shot to the highest level in over 40 months.
According to Yonhap News Agency, Tuesday's reading continues to mark the highest since Jan. 13, 2022, when the index closed at 2,962.09. Trade volume was heavy at 923 million shares worth 17.7 trillion won (US$13 billion), with losers outnumbering winners 560 to 324. Retail investors purchased 224.3 billion won worth of local shares, while foreigners and institutions unloaded 113 billion won and 105.6 billion won, respectively.
Overnight, Wall Street gained ground on hopes the military conflict between Israel and Iran will not further escalate after Tehran reportedly expressed hope to resume talks over its nuclear program, as well as the strong performance of tech shares boosted by planned discussions on artificial intelligence (AI) at the ongoing Group of Seven (G7) summit in Canada.
Seoul shares traded sharply higher earlier Tuesday, but quickly lost steam following reports of U.S. President Donald Trump ending his G7 trip early due to the Israel-Iran conflict, suggesting it may be too soon to expect de-escalation of tensions in the Middle East. "The KOSPI kicked off strong but trimmed its earlier gains as reports on persisting geopolitical conflicts in the Middle East sapped investors' risk appetite," Lee Kyoung-min, an analyst at Daishin Securities, said.
The cancellation of the envisioned summit between new South Korean President Lee Jae Myung and Trump on the sidelines of the G7 summit also had a negative impact on investors' sentiment, Lee added. In Seoul, large-cap tech and auto shares backed up the KOSPI. Market heavyweight Samsung Electronics climbed 1.57 percent to 58,100 won, and its chipmaking rival SK hynix added 0.4 percent to 249,000 won.
Top automaker Hyundai Motor went up 1.74 percent to 205,000 won, with its sister Kia jumping 2.15 percent to 99,600 won. Major shipbuilder Hanwha Ocean soared 7.85 percent to 92,000 won, but its rival HD Hyundai Heavy slid 2.78 percent to 436,500 won. Defense giant Hanwha Aerospace lost 1.65 percent to 954,000 won, and the country's biggest shipper HMM sank 5.25 percent to 23,000 won. The local currency was trading at 1,362.7 won against the greenback at 3:30 p.m., up 1.1 won from the previous session.