South Korea’s KOSPI Closes 0.7% Higher as Chip Stocks Rally
South Korea’s KOSPI closed 0.7% higher at 6,345.53 points, rising for a second consecutive trading session as a sharp gain in Samsung Electronics lifted the index. Overall market sentiment remained cautious, however, amid tensions in the Middle East. Among the index’s heavyweight stocks, chipmaker Samsung Electronics rose 4.13%, while peer SK hynix gained 0.35%. U.S. President Trump made new demands Monday in response to Iran’s calls for compensation, also requiring Iran to pay for “deaths caused during the war, attacks and protests.” The move could make efforts to reopen the Strait of Hormuz more complicated. Data showed that South Korea’s exports rose 45.3% year over year during the first 10 days of this month. South Korean Finance Minister Gu Yun-cheol said Tuesday that trading volume in single-stock leveraged exchange-traded funds had declined after the government introduced supplementary measures. He said authorities would take every possible policy measure to reduce market volatility. Ryu Sang-dae, the outgoing vice governor of the Bank of Korea, said Tuesday that the central bank was highly likely to raise interest rates again unless a major shock occurred, as it responds to persistent inflationary pressure. “Unless there is an extraordinary shock or special factor, the likelihood of another rate hike is high,” Ryu said at a news conference. His three-year term ends Aug. 20. “Monetary policy needs to be formulated in a forward-looking and preventive manner, so from the economic growth and inflation outlook, another rate hike is still necessary,” said Ryu, a member of the central bank’s seven-member Monetary Policy Board. Last month, the Bank of Korea raised rates for the first time in three and a half years and signaled that further increases could follow. Strong growth in South Korea, Asia’s fourth-largest economy, has added to inflation risks, and some Monetary Policy Board members have advocated preventive measures. Ryu said the central bank was more concerned about demand-driven inflation than any supply shock triggered by the conflict in the Middle East, because the domestic economic recovery was expected to generate gradual and sustained upward pressure on prices. He added that the won’s recent appreciation and stock-market volatility might require deeper discussion among committee members, but those factors were not the main drivers of policy decisions.
Among the index’s heavyweight stocks, chipmaker Samsung Electronics rose 4.13%, while peer SK hynix gained 0.35%.
U.S. President Trump made new demands Monday in response to Iran’s calls for compensation, also requiring Iran to pay for “deaths caused during the war, attacks and protests.” The move could make efforts to reopen the Strait of Hormuz more complicated.
Data showed that South Korea’s exports rose 45.3% year over year during the first 10 days of this month.
South Korean Finance Minister Gu Yun-cheol said Tuesday that trading volume in single-stock leveraged exchange-traded funds had declined after the government introduced supplementary measures. He said authorities would take every possible policy measure to reduce market volatility.
Ryu Sang-dae, the outgoing vice governor of the Bank of Korea, said Tuesday that the central bank was highly likely to raise interest rates again unless a major shock occurred, as it responds to persistent inflationary pressure. “Unless there is an extraordinary shock or special factor, the likelihood of another rate hike is high,” Ryu said at a news conference. His three-year term ends Aug. 20.
“Monetary policy needs to be formulated in a forward-looking and preventive manner, so from the economic growth and inflation outlook, another rate hike is still necessary,” said Ryu, a member of the central bank’s seven-member Monetary Policy Board. Last month, the Bank of Korea raised rates for the first time in three and a half years and signaled that further increases could follow. Strong growth in South Korea, Asia’s fourth-largest economy, has added to inflation risks, and some Monetary Policy Board members have advocated preventive measures.
Ryu said the central bank was more concerned about demand-driven inflation than any supply shock triggered by the conflict in the Middle East, because the domestic economic recovery was expected to generate gradual and sustained upward pressure on prices. He added that the won’s recent appreciation and stock-market volatility might require deeper discussion among committee members, but those factors were not the main drivers of policy decisions.