Seoul stocks surge over 2% amid expectations of U.S. rate cuts

South Korean stocks surged over 2% fueled by hopes for U.S. rate cuts. KOSPI closed at 2,734.36, with tech giants like Samsung Electronics and SK Hynix leading gains. The local currency strengthened against the U.S. dollar.

South Korean stocks surged over 2 per cent on Tuesday as investors found optimism in the possibility of rate cuts by the U.S. Federal Reserve this year. The local currency also strengthened against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) soared by 57.73 points, or 2.16 per cent, closing at 2,734.36. Trading activity saw 523 million shares traded, valued at 10.9 trillion won (approximately U.S.$8 billion), with winners outnumbering losers 582 to 285.

Investor confidence was fueled by growing speculation that the Federal Reserve might initiate rate reductions in response to reports indicating a slowdown in non-farm payroll growth in the United States, which registered 175,000 new jobs in April.

Han Ji-young, an analyst at Kiwoom Securities, attributed the KOSPI’s performance to gains observed on Wall Street during South Korea’s recent holiday.

Foreign investors remained active, acquiring a net 110 billion won worth of local shares for the sixth consecutive session. Meanwhile, retail investors sold a net of 183 billion won, while institutions bought a net of 77.4 billion won.

Leading tech companies experienced significant gains, with Samsung Electronics rising by 4.77 per cent to 81,300 won, and SK Hynix, the second-largest chipmaker, surging by 3.7 per cent to 179,600 won. LG Energy Solution, a battery manufacturer, saw a modest increase of 0.13 per cent, closing at 391,500 won.

In the automotive sector, Hyundai Motors gained 0.41 per cent, reaching 242,000 won, while its affiliate Kia saw a 1.58 per cent increase to 115,700 won. Hyundai Mobis, an auto parts maker, rose by 1.11 per cent, closing at 228,500 won.

Financial institutions also performed well, with Samsung Life Insurance climbing by 5.37 per cent to 88,300 won, and KB Financial edging up by 0.27 per cent to 73,900 won.

In the pharmaceutical sector, Samsung Biologics rose by 2.86 per cent to 194,400 won, while Celltrion saw an identical increase, closing at the same price.

The local currency closed at 1,360.1 won against the U.S. dollar, marking a gain of 2.7 won from the previous session’s close.