The domestic stock market soared despite the escalating geopolitical risks in the Middle East, including military clashes between Iran and Israel. As both countries began retaliatory responses over the weekend, demand for safe assets increased, yet the KOSPI index rebounded in just one day, reaching a new annual high.
On the 16th, the KOSPI index closed at 2,946.64, up 52.02 points (1.80%) from the previous transaction day. The index started at 2,903.50, 8.88 points (0.31%) higher than the last close, fluctuating in a narrow range before expanding its gains. This is the first time the index surpassed 2,940 based on closing price since Jan. 13, 2022 (2,962.09).
The KOSPI index, which recovered the 2,800 mark on the 5th, surpassed its previous high of 2,896.43 on the 11th and closed at 2,920.03 on the 12th. However, it had dropped to 2,894.62 following military clashes that broke out in the Middle East last Friday (June 13).
In the early session, the market rallied as individual investors engaged in bargain hunting, but during the day, institutional investors took the lead in buying, thus increasing the gains. On this day, individuals and institutions purchased a net 45.8 billion won and 252.3 billion won, respectively. Foreign investors sold 322.3 billion won net, but they net bought 96.2 billion won in the KOSPI 200 futures market.
Among the top market capitalization stocks, most closed higher except for Samsung Electronics, Samsung Biologics, and LG Energy Solution. SK hynix expanded its gains compared to the early session, finishing at 248,000 won, up 12,500 won (5.31%). As the conflict between Iran and Israel persisted, defense-related stocks such as Hanwha Aerospace, Hanwha Systems, and LIG Nex1 also surged.
The utility sector saw gains from companies such as LS ELECTRIC, Hyosung Heavy Industries, HD Hyundai Electric, and Sanil Electric. As Hwang Jeong-woo was appointed chief of AI at the new government, corporations in the information and communication (IT) sector, including NAVER, Samsung SDS, and LG CNS, also rose.
Lee Kyung-min, a researcher at DAISHIN SECURITIES, noted, "While it is true that uncertainty has increased in the short term, the impact of geopolitical risks on the stock market in the medium to long term is limited," and added, "The likelihood of Iran taking retaliatory measures, such as blocking the Strait of Hormuz, is low, and the impact will also be limited."
The S&P 500 futures in the U.S. also started higher, currently recording an increase of 20.25 points (0.34%) at 5,999.50. Major indexes in China, including the Shanghai Composite (0.33%), Shenzhen Composite (0.57%), and Hong Kong's Hang Seng Index (0.36%), are also on the rise. Gold futures prices are experiencing slowing upward momentum in the $3,420 range, and the dollar index has turned downward in the afternoon. On this day, the won-dollar exchange rate in the Seoul foreign exchange market was noted at 1,363.8 won, down 5.8 won.
The KOSDAQ index recorded an increase of 8.40 points (1.09%) to 777.26. Starting at 767.64, down 1.22 points (0.16%) from the previous session, it fluctuated in a narrow range before turning upward. Foreign and institutional investors net bought 115.3 billion won and 41.9 billion won, respectively, while individuals sold off 149.2 billion won.
Alteogen, which experienced a sharp drop due to investor sentiment weakening, rebounded by over 5% following the announcement of the Korean Intellectual Property Office's commencement of a patent invalidation review for Halorazyme. PharmaResearch, which had plummeted on the previous trading day before its spin-off announcement, along with HUGEL, Peptron, and LigaChem Biosciences, also saw gains. In contrast, Ecopro, HLB, Ecopro BM, and Rainbow Robotics closed lower.