KOSPI Hits Record High Amid Hopes for U.S.-Iran Peace Talks and Tech Rally

Lead

SEOUL — South Korea's benchmark KOSPI closed at a record high on Tuesday, surging 2.72 percent to 6,388.47 points, as investors pinned hopes on U.S.-Iran peace talks and a revival in the tech sector, according to Yonhap News Agency. The index surpassed its previous peak of 6,307.27 points recorded on Feb. 26, marking a dramatic recovery from the extreme volatility triggered by the Middle East crisis.

Coverage Comparison

Two reports from Yonhap News Agency, both published on Tuesday, detailed the market's milestone. The first report highlighted the market capitalization of KOSPI-listed firms swelling to a record high of 5,236 trillion won, citing the Korea Exchange, the country's main bourse operator. The second report, while covering the same figures, omitted this specific capitalization statistic but included additional context about the market's performance since the onset of the U.S.-Iran war.

Both reports noted that Seoul shares had experienced extreme volatility since the war began, with the index once falling by as much as 12 percent in a single trading day and rising by as much as 9 percent. They also referenced data from Yonhap Infomax, the financial arm of Yonhap News Agency, showing that the South Korean stock market braced for the sharpest drop of over 19 percent among global peers in March, as the Middle East crisis fueled concerns over high inflation and economic slowdown.

Key Claims

• Record Close: The KOSPI closed 2.72 percent higher at 6,388.47 points, beating the previous high of 6,307.27 set on Feb. 26, as reported by both Yonhap articles.

• Record Market Capitalization: The market capitalization of KOSPI-listed firms reached a record 5,236 trillion won, according to the Korea Exchange, cited in the first Yonhap report.

• Impact of Middle East Crisis: Global oil prices soared to record highs above US$100 per barrel following Iran's closure of the Hormuz Strait, a key oil route, as reported by Yonhap. The crisis had previously caused extreme volatility and a sharp downturn in South Korean stocks.

• Investor Sentiment: Investors are showing reduced sensitivity to Middle East developments and are pinning hopes on progress in U.S.-Iran peace talks, according to Han Ji-young, an analyst at Kiwoom Securities, quoted in both reports. The analyst also noted that foreign investors have returned to the local market after net selling a record 35 trillion won (US$23.8 billion) worth of local stocks last month.

• Tech Rally: Optimism over South Korea's major chipmakers is reemerging, with Samsung Electronics Co. reporting record-high first-quarter earnings, including an operating profit of over 50 trillion won, as stated in the first Yonhap report. Investors are also turning their focus to SK hynix Inc.'s upcoming earnings release, mentioned in the second report.

Perspectives

Market analysts view the record high as a positive sign of recovery, with reduced sensitivity to geopolitical risks and renewed confidence in the tech sector. However, the reports also underscore the fragility of the market, given the recent extreme volatility and the ongoing uncertainties surrounding the Middle East situation. The reliance on peace talks and tech earnings suggests that any setback in these areas could impact market stability.