Seoul - The Seoul stock exchange soared sharply on Friday afternoon. Citing a Yonhap report, Friday, June 12, the KOSPI index rose nearly 8 percent after US President Donald Trump raised hopes that the Iran war could end soon.
KOSPI (Korea Composite Stock Price Index), the main index of the Korean Stock Exchange, rose 606.46 points or 7.81 percent to 8,370.41 at 11.20 local time. After opening strong, the index remained above 8,000 as foreign and institutional investors bought shares of leading technology companies.
Flagship technology stocks refer to the shares of large companies, strong in business, and many are market benchmarks. In South Korea, this group includes names such as Samsung Electronics and SK hynix.
Market sentiment improved after Trump said Washington had reached a "major settlement" regarding the war with Iran. The deal is said to be signed as early as this weekend. However, Iran has not confirmed the news.
Therefore, the market rally has not yet fully gained a strong foothold. Political certainty remains key.
Most large-cap stocks moved higher, following the strengthening of Wall Street in previous trading. Wall Street refers to the main stock market in the United States which often serves as a reference for global exchanges.
Samsung Electronics jumped 11.37 percent. Its rival, SK hynix, rose 8 percent.
Automotive and financial stocks also strengthened. Hyundai Motor rose 5.53 percent. LG Electronics strengthened 6.19 percent. KB Financial jumped 8.05 percent.
On the other hand, the Bank of Korea is still showing a tight stance on interest rates. Governor Shin Hyun-song said the central bank needs to raise interest rates without delay in the institution's 76th anniversary message.
A tight stance means the central bank tends to raise or maintain high interest rates to curb inflation. This policy can usually suppress the stock market because borrowing costs become more expensive.
The Korean won was trading at 1,519.9 won per US dollar, strengthening 9 won from the previous session.
The big rise in KOSPI shows investors are quickly entering technology stocks as geopolitical risks appear to be easing. However, the direction of the market will still be determined by the certainty of the Iran deal and the Bank of Korea's move on interest rates.
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