Kospi Index Returns to 8,000 Points Rising Over 8%, Samsung Electronics Soars 11%, SK Hynix Gains 8%

TradingKey - During the Asian trading session on June 12, South Korea's benchmark KOSPI index opened sharply higher by more than 7%, reclaiming the 8,000-point threshold before extending gains to over 8%. As of press time, the KOSPI stood at 8,388.53, up 624.58 points or 8.04% from the previous session. During the morning session, program trading was halted for five minutes after KOSPI 200 index futures triggered a sidecar mechanism upon rising 5%.

[Source: TradingView]

Among heavyweight stocks, Samsung Electronics surged over 11% and SK Hynix rose nearly 8%, with the latter briefly touching the 2.3 million won mark in early trading as the two semiconductor giants took turns leading the market. On the news front, according to a report by The Information, Google ( GOOGL) is in talks with Samsung to utilize Samsung's 2nm process for the production of the I/O Die (a critical component for memory connectivity) of its 10th-generation TPU "Icefish" chip, while the core computing engine will still be manufactured by TSMC's ( TSM) 1.4nm foundry process.

The core driver of this rally is the dramatic easing of geopolitical risks. Overnight, U.S. stocks surged across the board as expectations for a cessation of hostilities between the U.S. and Iran mounted, with the Nasdaq rising 2.54%, the S&P 500 up 1.75%, and the Philadelphia Semiconductor Index jumping 7.9%. Simultaneously, the Korean won strengthened against the U.S. dollar, moving from 1,528.9 to around 1,518, as safe-haven sentiment significantly dissipated. In terms of capital flows, foreign investors turned net buyers for the first time after 24 consecutive sessions of net selling.

On the macro front, the South Korean Ministry of Economy and Finance noted in its monthly "Green Book" economic report released that day that sustained export strength and a recovery in business confidence are underpinning the economic rebound, though the dual pressures of inflation and employment caused by tensions in the Middle East still require vigilance.