Around two months after a severe downturn due to the Middle East conflict, South Korea’s stock market surged on Tuesday to reach a new all-time high. The benchmark KOSPI closed 2.72 percent up at 6,388.47 points, surpassing its previous peak set on Feb. 26 at 6,307.27 points. Market capitalization of KOSPI-listed companies also hit a record high of 5,236 trillion won, as reported by the Korea Exchange.
Seoul shares had experienced significant volatility during the U.S.-Iran conflict, with fluctuations of up to 12 percent in a single trading day. In March, the market faced a steep decline of over 19 percent compared to global peers, driven by concerns over inflation and economic slowdown due to the Middle East crisis. Global oil prices surged above US$100 per barrel following Iran’s disruption of the Hormuz Strait, a crucial oil passage.
Investors are now displaying less sensitivity to Middle East developments and are optimistic about progress in U.S.-Iran peace talks. They are also hopeful about the resurgence of South Korea’s major chipmakers. Foreign investors have returned to the local market after a significant net sell-off last month. Market attention is shifting towards corporate earnings, with SK hynix Inc. set to announce its first-quarter results this week.
Samsung Electronics Co. reported record-high earnings in the first quarter, with an operating profit exceeding 50 trillion won, driven by increased chip demand in the AI sector. Analysts anticipate SK hynix to also deliver strong first-quarter results, supported by robust sales of high bandwidth memory for AI and a tight supply of DRAM chips. Market experts believe that government efforts to boost shareholder returns and reform capital markets could further propel KOSPI’s momentum.
Despite geopolitical uncertainties and an impending deadline for the two-week ceasefire, global banks maintain a positive outlook on the South Korean market. Goldman Sachs raised its 12-month target for KOSPI from 7,000 to 8,000 points, citing improved industry fundamentals. JPMorgan Chase & Co. considers South Korea as one of its top preferred markets in the region, raising its bullish scenario for KOSPI to 8,500 points.
