Seoul Stocks Rise Over 1 Percent on Tariff Delay Announcement

(ATTN: ADDS bond yields at bottom)

SEOUL, Feb. 4 -- South Korean stocks experienced a strong recovery on Tuesday, closing more than 1 percent higher as investors turned their attention to blue-chip stocks. This positive sentiment followed the announcement from Washington to delay the implementation of tariffs on goods from Canada and Mexico. In addition to stocks, the Korean won appreciated against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) increased by 27.74 points, equivalent to a 1.13 percent rise, finishing the day at 2,481.69.

Trading activity was robust, with a total of 473 million shares changing hands, valued at 18.8 trillion won (approximately US$7.39 billion). Market performance showed a favorable distribution, with 690 stocks advancing while only 207 declined.

Investors included both institutional and foreign buyers, who collectively purchased a net of 205.7 billion won worth of local stocks. Conversely, retail investors sold a net of 296 billion won in shares.

This rebound follows a substantial drop of 2.52 percent in the KOSPI on Monday, driven by concerns over the U.S. government's recent decision to impose high tariffs on goods from Canada and Mexico, posing potential risks for South Korean companies operating in those markets.

However, U.S. President Donald Trump announced a temporary pause on the tariffs for one month, allowing Canada and Mexico to present updated plans to combat drug trafficking across their borders.

According to Han Ji-young, an analyst at Kiwoom Securities, "The domestic stock market seems to have rebounded, driven by perceptions of excessive declines in the previous session and the news of postponed U.S. tariff impositions against Mexico and Canada."

Gains were broadly seen among blue chips, with major player Samsung Electronics soaring 3.33 percent to 52,700 won. Its competitor, LG Electronics, edged up by 0.26 percent to 78,400 won.

Other sectors also posted gains, particularly shipbuilders and financial shares. Hanwha Ocean's stock surged by 6.65 percent to 60,900 won, while KB Financial saw an increase of 2.82 percent to 91,300 won.

In the gaming industry, Krafton saw a slight uptick of 0.69 percent, reaching 362,500 won following news of a meeting between its executives and OpenAI founder, Sam Altman, in Seoul for potential collaboration discussions.

On the contrary, tech giant Kakao experienced a decline, falling 2.15 percent to 40,900 won, despite the announcement of a partnership with OpenAI earlier in the day.

As of 3:30 p.m., the local currency traded at 1,462.9 won against the U.S. dollar, marking an increase of 4.3 won from the previous trading session.

In the bond market, prices dropped, which caused yields to rise. The yield on three-year Treasury bonds increased by 1.2 basis points to 2.584 percent, while the return on the benchmark five-year government bonds rose by 1.4 basis points to 2.703 percent.

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stocks, market, tariffs