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Seoul shares open higher despite heightened N. Korea tension

Shares of big tech firms remain strong with buying rush from foreign investors

By Im Eun-byel

Published : May 31, 2023 - 16:04

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Electronic boards showing the benchmark bourse Kospi and the Korean won against the US dollar at closing are on display at a dealing room of the Hana Bank headquarters in Seoul on Wednesday. (Yonhap) Electronic boards showing the benchmark bourse Kospi and the Korean won against the US dollar at closing are on display at a dealing room of the Hana Bank headquarters in Seoul on Wednesday. (Yonhap)

Despite North Korea's failed satellite launch attempt in the morning, Seoul shares remained relatively stable on Wednesday.

The local stock market opened higher backed by foreigners’ buying spree, but closed lower as a newly released figure showed that China’s economic recovery has lost steam.

North Korea's launch attempt did not have much impact on the market, as it had repeatedly signaled its intention to launch its first military spy satellite over the past few days.

Korea's benchmark Kospi closed at 2577.12, 8.4 points lower than the previous session’s close. It opened at 2,586.03 and peaked at as high as 2,596.31, the highest since June 10 last year.

The stock market opened higher as foreign investors snapped up South Korean tech shares, anticipating the global chip industry’s imminent recovery after a prolonged slump. Foreign investors net bought shares worth 215.6 billion won ($162.6 million) on Wednesday.

Kospi wiped out its early gains and closed lower as China’s official Manufacturing Purchasing Managers Index for May fell to a five-month low of 48.8, indicating a slower-than-expected recovery.

Big tech stocks stood strong Wednesday, buoyed by foreign investors’ buying rush.

Shares of tech heavyweight Samsung Electronics hit up to 72,500 won. Foreign investors have been raising their stake in Samsung Electronics, net buying 400 billion won on Tuesday. Net purchases this year adds up to 10.26 trillion won. It wrapped up at 71,400 won, down from 72,300 won at the previous session’s close.

Chip giant SK hynix closed at 108,600 won, a little lower than the previous session's closing price of 110,300 won, but went up to a high of 110,900 won during this trading session.

Leading biotechnology firm Samsung Biologics rose to 787,000 won, 10,000 won higher than the 778,000 won from the previous session’s close. It closed at 784,000 won.

Large-cap battery maker LG Energy Solution hit as high as 604,000 won. Though it experienced a slight drop, it remained above 590,000 throughout the day and closed at 599,000 won, higher than its Tuesday closing price of 580,000 won.

Shares of battery maker Samsung SDI closed at 718,000 won after reaching their peak at 723,000 won.

With foreign investors’ recent buying spree focused on tech shares, the stock of Korean carmakers did not see many ups and downs. The country’s top automaker, Hyundai Motor, closed at 200,000 won while Kia Motors closed at 89,500 won, seeing little change from the closing prices of Tuesday.

“Foreign investors are leading the stock market, heavily buying shares related to the semiconductor industry,” analyst Lee Jae-seon from Hyundai Motor Securities said. “The North Korean risk has not been reflected on the stock market.”

Though concerns mounted that North Korea’s launch attempt might pose geopolitical risks for South Korea, the currency remained relatively stable as well.

The Korean won against the US dollar closed at 1,327.2 won, 2.3 won higher than at the previous session’s close.

It opened at 1,321 won and strengthened further, coming down to as low as 1,318 won during the day, with lowered risk of the US hitting its first-ever default crisis as a debt ceiling deal has been reached.

However, it eventually weakened in the afternoon with the bleak projections on China’s economic recovery.