Seoul shares rise for 3rd day on auto, bio gains; tariff concerns linger
Seoul shares extended their winning streak to a third day Tuesday, led by auto and bio gains, though investors remain cautious about US President Donald Trump's tariff policies. The Korean won also rose against the US dollar.
The benchmark Korea Composite Stock Price Index gained 16.56 points, or 0.65 percent, to close at 2,565.42.
Trade volume was moderate at 526.42 million shares worth 8.03 trillion won ($5.58 billion), with gainers outnumbering losers 659 to 236.
Institutions bought a net 356.65 billion won worth of stocks, while foreigners and individuals sold 235.13 billion won and 166.44 billion won, respectively.
Analysts said investors remained watchful ahead of quarterly earnings reports from major global companies, including Apple, Amazon, Samsung Electronics and LG Chem, while continuing to assess the potential impacts from the US tariffs.
In Seoul, auto and bio stocks led the gains.
Top automaker Hyundai Motor rose 2.01 percent to 192,800 won, and its smaller affiliate Kia climbed 2.14 percent to 90,600 won.
Auto shares advanced on reports that Trump may ease tariffs on foreign parts used in vehicles assembled in the United States, to reduce the impact of his automotive trade policies.
Major bio firm Samsung Biologics gained 1.35 percent to close at 1,051,000 won and smaller rival Celltrion jumped 3.42 percent to 163,400 won.
Leading battery maker LG Energy Solution gained 1.16 percent to 350,000 won, while LG Chem jumped 2.04 percent to 225,500 won.
Among decliners, chip giant SK hynix fell 0.66 percent to 180,800 won, and battery maker Samsung SDI shed 0.33 percent to 183,600 won.
Shipbuilders also lost ground, with Hanwha Ocean plunging 12.09 percent to 78,500 won and Samsung Heavy Industries shedding 1.19 percent to 14,970 won.
The local currency closed at 1,437.30 won against the greenback at 3:30 p.m., up 5.3 won from the previous session. (Yonhap)
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The South Korean stock market soared on each of the first two trading days following President Lee Jae-myung's official inauguration after securing a decisive victory in the early election held on June 3, winning by a substantial margin over his opponents. The peaceful transition of power and the political clarity it brings have been met with visible enthusiasm. Undoubtedly, Lee and his party, together with the people of South Korea, have every reason to relish the celebratory honeymoon phase of their administration. The stock market's benchmark Kospi posted a remarkable combined gain of 4.2 percent over those two days to end at 2,812.05 points on Friday, representing the highest closing level in nearly a year since July 18 last year. During the same period, foreign investors made net purchases totaling 2.07 trillion won ($1.52 billion) on the main board, marking the most net inflow from overseas investors in a year. 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In our current era, financial markets serve a parallel — yet far more complex and consequential — role. They function as barometers of public and investor sentiment, allowing market participants around the globe to continuously evaluate a nation's economic performance, policy direction and future outlook. From that perspective, the recent rally in the stock market, alongside the strengthening of the Korean won, can be read as a strong initial endorsement of the promises and rhetoric offered by President Lee during the campaign. His campaign period, however, was notably brief, offering limited time for his team to flesh out fully detailed policy plans. Nonetheless, the messaging struck a chord, especially among investors and market observers eager for reform and modernization. One of Lee's key campaign priorities is addressing the "Korea Discount" — a persistent and well-documented phenomenon that refers to the comparatively low valuation of Korean-listed companies relative to their international peers. It is largely attributed to weaknesses in corporate governance, low shareholder returns and systemic inefficiencies in South Korea's regulatory and economic framework. To address this issue, Lee has pledged to revise Article 382-3 of the Commercial Act. The proposed amendment would obligate directors of listed companies to act not just in good faith but specifically in the interest of both the company and all its shareholders. The current version of the act requires directors to act for the benefit of the company, but lacks explicit emphasis on shareholder interests. Lee has also vowed to introduce the cumulative voting system. Many view this as a powerful tool for enhancing minority shareholder rights, as it allows shareholders to pool votes to elect at least one representative to a board, in contrast to the traditional system of one vote per share per director. Deliberative policymaking In addition, he supports other measures aimed at prompting companies to return a greater portion of earnings to shareholders and limiting the negative effects of corporate spinoffs that often disadvantage minority investors. While these governance-focused reforms are grabbing headlines, Lee has also promised fiscal stimulus on a massive scale. Though not explicitly intended to push stock prices higher, a major supplementary budget is expected to provide a strong economic stimulus to offset faltering domestic demand. This comes at a time when South Korea, an export-driven economy, is grappling with declining overseas sales due mainly to the US government's imposition of steep tariffs on most of its trading partners. It is worth noting that the previous administration had already introduced a 13.8 trillion won supplementary budget back in May, aimed to assist those affected by weak consumer spending, fund recovery in wildfire-stricken regions and support the development of national artificial intelligence infrastructure. The new extra budget being considered under Lee's administration is reportedly about three times the size of the previous one, signaling a bold fiscal approach. Taken together, these initiatives have offered a strong psychological boost to the stock market. They enhance the growth outlook for shares in a wide range of South Korean companies, many of which have long underperformed relative to their counterparts in other advanced economies. The anticipation of pro-growth reforms, combined with short-term liquidity injections, has widened the upside potential for equities. Yet, such optimism must be tempered with realism. The market lift resulting from policy announcements and fiscal measures may not be sustainable unless underpinned by genuine improvements in economic fundamentals. Corporate earnings, gross domestic product growth and export competitiveness — particularly in light of evolving global trade dynamics and tariff uncertainties — remain the true drivers of long-term performance. Furthermore, the risk of unintended consequences looms large. Even the best-intentioned policy can yield adverse results. Business leaders and major corporations have already voiced concerns that overly aggressive changes to the Commercial Act might deter boards from making bold, strategic investments, out of fear of legal entanglements or shareholder activism. Similarly, the large supplementary budget, if not crafted with precision and expertise, risks missing its mark. 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