Stocks in Seoul rise due to bargain hunting and optimism over potential US interest rate cuts; South Korean won experiences a significant increase
South Korea's stock market experienced a rebound on Monday, with the benchmark Kospi closing at 3,147.75, up 0.91 percent. The increase was primarily due to positive momentum in stock prices linked to improvements in exports and inventories-to-shipments ratios, alongside solid economic growth signals and a trade deal with the US that reduced uncertainty and lowered tariffs from previously considered higher rates.
The Kospi's rebound was also driven by a boost in investors' risk appetite, with the possible reconsideration of a tax revision proposal by the ruling party. This proposal had earlier triggered declines but its potential reconsideration seemed to have encouraged investors to take on more risk.
The trade volume on Monday was 291 million shares worth 9.66 trillion won ($6.98 billion). Some of the notable gainers included Hyundai Rotem, which escalated 3.09 percent to 200,000 won, and Korea Electric Power Corp., which climbed 2.9 percent to 37,200 won.
The tech sector also saw gains, with Samsung Electronics closing at 69,700 won, up 1.16 percent, and Samsung Biologics climbing 1.35 percent to 1.05 million won. In the automotive sector, Hyundai Motor added 0.48 percent to 211,000 won, while Kia increased 1.98 percent to 102,800 won.
Retail investors sold a net 300 billion won of local shares, but institutions and foreigners bought local shares worth 131.8 billion won and 83.3 billion won, respectively. Naver jumped 3.11 percent to 232,500 won, and Celltrion advanced 1.52 percent to 173,900 won.
The local currency (won) was quoted at 1,385.2 against the greenback at 3:30 p.m., up 16.2 won from the previous session. The strength of the won could be attributed to the positive sentiment surrounding the South Korean economy.
Weaker-than-expected US jobs data raised concerns about a possible economic recession in the US, but also fueled hopes for multiple rate cuts by the Federal Reserve later this year. This could potentially benefit South Korea's export-driven economy, as a weaker US dollar could make South Korean exports more competitive in the global market.
The Conference Board noted that the Leading Economic Index (LEI) for South Korea rose 1.0% in June 2025, led by gains in stock prices, exports, and inventories-to-shipment indexes, signaling expected solid economic growth in the near future. The US-Korea trade deal, despite tariffs remaining at 15%, alleviated uncertainty from earlier tariff threats, contributing to a more positive market outlook.
In conclusion, the rebound in South Korean stocks on Monday was driven by positive economic indicators and trade developments, as well as a potential reconsideration of a tax revision proposal by the ruling party. The strength of the won and the potential benefits of a weaker US dollar for South Korea's export-driven economy also played a role in the market's positive sentiment.
The positive momentum in the South Korean economy, with improvements in exports, inventories-to-shipments ratios, and solid economic growth signals, as well as the US-Korea trade deal, encouraged institutions and foreign investors to buy local shares, contributing to the rise in the Kospi.
The tech sector, including Samsung Electronics and Samsung Biologics, saw gains on Monday, reflecting the positive sentiment towards the South Korean economy and the potential benefits of a weaker US dollar for the export-driven tech sector.
