KOSPI surges over 6% to the 5,570 level on hopes Middle East risks will ease

The Financial News: South Korea’s stock market is rebounding sharply after United States of America (US) President Donald Trump hinted at the possibility of an end to the war in the Middle East. In early trading on the 10th, the Korea Composite Stock Price Index (KOSPI) jumped more than 6% from the previous session, reclaiming the 5,570 level. The steep drop of nearly 6% the day before led investors to view the sell-off as excessive, boosting buying sentiment, while overnight gains in all three major New York City indices provided additional momentum for the rebound.
As of 10:48 a.m. that day, KOSPI was at 5,580.82, up 6.26% from the previous close. The index opened at 5,523.21, 5.17% higher than the prior session, and has continued to extend its gains. Although KOSPI plunged 5.96% the previous day, it is now rebounding and maintaining an upward trend.
At 9:06 a.m., shortly after the market opened, futures on the KOSPI 200 Index surged, triggering a circuit breaker known as a sidecar that suspended program buy orders for five minutes. The so-called fear gauge is also moving lower. The KOSPI 200 Volatility Index (VKOSPI), which had climbed above the 80 level the previous day, is now at 66.07, down 8.01% from the prior session.
In the main stock market, foreign investors are net buyers of 1.1469 trillion won, and institutions are net buyers of 497.5 billion won, helping to lift the index. Individual investors, by contrast, are net sellers of more than 1.5 trillion won.
Overnight in New York City, all three major indices closed higher after President Trump mentioned the possibility of ending the war in the Middle East. On the 9th (Eastern Time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average (DJIA) rose 0.50% from the previous session. The Standard & Poor's 500 Index (S&P 500) and the NASDAQ Composite Index also gained 0.83% and 1.38%, respectively, by the close.
The move came after Donald Trump said in an interview with CBS News that the war was "in its final stages." Futures prices for West Texas Intermediate crude oil (WTI) nearly touched 120 dollars per barrel during the session, but pared gains after Trump’s remarks were made public.
Major domestic blue chips by market capitalization are also rebounding on expectations of an end to the conflict. Samsung Electronics is trading at 189,950 won, up 9.48%. SK hynix is at 939,000 won, a gain of 12.32%. Most large-cap stocks, including Hyundai Motor Company (up 5.52%) and LG Energy Solution (up 2.09%), are posting gains.
By contrast, Hanwha Systems is down 1.97%, and HD Hyundai Heavy Industries is down 0.35%.
By sector, all industries on the KOSPI market are advancing, led by electrical and electronics up 9.38%, manufacturing up 6.97%, and machinery and equipment up 6.38%.
At the same time, KOSDAQ (Korean Securities Dealers Automated Quotations) was at 1,147.26, up 4.08% from the previous close. The index opened at 1,147.99, 4.15% higher, and has since trimmed some of its gains. On the KOSDAQ market, individual investors and institutions are net buyers of 79.2 billion won and 249.3 billion won, respectively, while foreign investors are net sellers of 313.2 billion won.

elikim@fnnews.com Reporter Kim Mi-hee Reporter