South Korean stocks sharply rebounded to an almost four-year high Tuesday over eased tensions in the Middle East after US President Donald Trump announced that Israel and Iran have agreed on a ceasefire to end their conflict. The local currency climbed sharply against the US dollar.
The benchmark Korea Composite Stock Price Index added 89.17 points, or 2.96 percent, to close at 3,103.64, surpassing the 3,100 threshold for the first time in three years and nine months.
Trade volume was heavy at 566.7 million shares worth 18.8 trillion won ($13.8 billion), with winners outnumbering losers 766 to 138.
Foreigners and institutions combined bought local shares worth 694.5 billion won, while retail investors sold shares worth 641.8 billion won.
Trump made the announcement after Iran fired short- and medium-range ballistic missiles at Al Udeid Air Base in Qatar — the largest US military installation in the Middle East — in response to America's attack on three key nuclear sites in Iran over the weekend.
The US president said that without the ceasefire, the war could have gone on for years and destroyed the entire region.
"The local stock market was buoyed by news of the ceasefire between Israel and Iran, a sharp drop in international oil prices and the strong overnight performance of the US stock market led by Tesla," said Han Ji-young, an analyst at Kiwoom Securities.
Most blue chips ended in positive terrain, with chipmakers, automakers and financials leading the market advance.
Market heavyweight Samsung Electronics rose 4.31 percent to 60,500 won, and its chip rival SK hynix surged 7.32 percent to 278,500 won.
Top bio company Samsung Biologics gained 1.21 percent to 1,004,000 won, and leading battery manufacturer LG Energy Solution climbed 2.21 percent to 300,500 won. Top automaker Hyundai Motor added 2.23 percent to 206,000 won.
In contrast, refiners retreated amid the drop in international oil prices. Leading refiner SK Innovation fell 0.97 percent to 101,800 won, and S-Oil plummeted 6.39 percent to 58,600 won.
The local currency was trading at 1,360.2 won against the greenback at 3:30 p.m., up 24.1 won from the previous session.
Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys fell 3.7 basis points to 2.461 percent, and the return on the benchmark five-year government bonds dropped 4.6 basis points to 2.616 percent. (Yonhap)
