South Korean shares log two-week closing high on US-Iran deal

[SEOUL] South Korean shares rose more than 2 per cent on Tuesday (Jun 16) to notch their highest close in two weeks, tracking an overnight rally on Wall Street on the US-Iran peace deal.

The benchmark Kospi closed up 180.62 points, or 2.11 per cent, at 8,726.60, its highest closing level since June 2. On Monday, it rose 5.2 per cent.

Wall Street rallied on Monday, with the Nasdaq climbing 3 per cent and the Dow marking a record-high close after the United States and Iran struck a preliminary agreement to end the Middle East war and reopen the Strait of Hormuz, leading to an easing of inflation fears as crude oil prices dropped.

“Market sentiment is more sensitive to positive news than negative news,” Seo Sang Young, an analyst at Mirae Asset Securities, said, adding that there was muted reaction to Japan’s rate hike.

The Bank of Japan raised interest rates to a 31-year high on Tuesday, a widely expected move that signalled its focus on countering inflation risks from the Middle East conflict.

Among index heavyweights, chipmaker Samsung Electronics rose 1.78 per cent while peer SK Hynix gained 4.11 per cent. Battery maker LG Energy Solution slid 2.38 per cent.

Hyundai Motor and sister automaker Kia Corp were down 1.08 per cent and up 1.61 per cent, respectively. Steelmaker POSCO Holdings shed 1.27 per cent, while drugmaker Samsung BioLogics rose 0.08 per cent

Of the total 917 traded issues, 519 shares advanced, while 360 declined.

Foreigners were net buyers of shares worth 1.4 trillion won (S$1.2 billion).

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The won was quoted at 1,511.6 per dollar on the onshore settlement platform, 0.24 per cent higher than its previous close at 1,515.2.

The most liquid three-year Korean treasury bond yield fell by 2.2 basis points to 3.723 per cent, while the benchmark 10-year yield fell by 7.2 basis points to 4.123 per cent. REUTERS