Seoul Stocks Surge to Record Peak Amid US-Iran Peace Hopes and AI Tech Boom
South Korea's stock market soared to a new all-time peak on Tuesday, marking a powerful recovery. The rally was fueled by renewed optimism surrounding potential US-Iran peace talks and a vigorous resurgence in the crucial global technology sector.The benchmark KOSPI index closed at 6,388.47 points, surging 2.72 percent. This figure established a new record, surpassing the previous high of 6,307.27 recorded on February 26. Furthermore, the market capitalization of listed KOSPI firms reached a record 5,236 trillion won, according to the Korea Exchange.
Rally Overcomes Geopolitical Uncertainty
The market demonstrated a sharp recovery after grappling with extreme volatility. Since the start of the US-Iran conflict, Seoul shares had faced significant turbulence, including drops of up to 12 percent in a single day.Earlier, the country’s stock market had braced itself for a steep decline, dropping over 19 percent among global peers in March. This slump was attributed to mounting concerns regarding high inflation and economic slowdowns, fueled by the Middle East crisis.
Tech Sector Leads Revival on AI Demand
A major catalyst driving the recent breakout is the palpable optimism returning to the technology sector. Investor focus has shifted away from geopolitical flare-ups toward robust corporate earnings and tech fundamentals.Samsung Electronics Co., the nation’s top company, reported record-high first-quarter earnings, announcing an operating profit exceeding 50 trillion won. This impressive result was significantly aided by surging global demand for chips, particularly those used in artificial intelligence (AI).
Market watchers anticipate that SK hynix will follow suit, delivering a "super" earnings surprise for Q1. This expected beat is underpinned by strong sales of its high bandwidth memory (HBM), crucial for AI applications, and the tight supply chain for DRAM chips.
Optimism Boosted by Foreign Investment Inflow
Analyst Han Ji-young of Kiwoom Securities noted that investors are showing reduced sensitivity to Middle East developments. They are instead pinning hope on progress in the US-Iran peace talks.This bullish sentiment is mirrored by foreign investors, who have returned to the local market. Previously, foreign investors had engaged in net selling of a record 35 trillion won (US$23.8 billion) worth of local stocks last month.
Global Banks Maintain Bullish Outlook
Looking ahead, sentiment remains highly positive despite ongoing geopolitical uncertainties and the approaching deadline for the two-week ceasefire.Major international financial institutions are maintaining their bullish stance on the local market. Goldman Sachs recently raised its 12-month target for the KOSPI from 7,000 points to 8,000 points, citing improving fundamentals across various industries. JPMorgan Chase & Co. also reaffirmed South Korea as a top preferred market, raising its "bull" case for the KOSPI to 8,500 points.
Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
The information provided is for general informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. Readers are advised to rely on their own assessment and judgment and consult appropriate financial advisers, if required, before taking any investment-related decisions.
Any views, opinions, or statements expressed, where applicable, are those of the respective analysts or experts and do not reflect the views of this website. The website has no association with such viewpoints and does not assume any responsibility for them.