KOSPI Surges Past 4,130 on Santa Rally Hopes, But Banks and Autos Stumble
South Korea's KOSPI index topped 4,130 on Santa Rally hopes, led by tech giants like Samsung Electronics. However, auto and financial sectors lagged, showing a divided market.
It’s a tale of two markets in Seoul. South Korea's benchmark KOSPI index surged on hopes of a year-end “Santa Claus rally,” but a closer look reveals a split personality as auto and financial stocks stumbled. In the first 15 minutes of trading on December 26, the index added 22.97 points, or 0.56%, to reach 4,131.59, tracking pre-Christmas gains on Wall Street fueled by renewed confidence in the U.S. economy.
Tech and AI Lead the Charge
The market's advance was powered by a strong showing in the tech sector. Tech giant Samsung Electronics kicked off 2.88% higher, while its chipmaking rival SK hynix increased by 1.02%. Demonstrating the intense investor interest in artificial intelligence, AI investment firm SK Square soared 3.74%. Major shipbuilders HD Hyundai Heavy and Hanwha Ocean also started in positive territory, rising 0.39% and 1.43%, respectively.
On the flip side, several key sectors faced headwinds. Leading battery maker LG Energy Solution went down 0.51%. Auto and financial shares also started in the red. Hyundai Motor edged down 0.09% and its affiliate Kia fell 0.21%, while KB Financial and Shinhan Financial lost 1.35% and 1.41%, respectively.
Global Cues and Currency Watch
The positive sentiment stemmed from the U.S., where the Dow Jones Industrial Average added 0.6% and the tech-heavy Nasdaq rose 0.22%. According to Yonhap, the U.S. Volatility Index (VIX), known as the fear index, fell to 13.4 points, its lowest mark this year. However, a weaker local currency could weigh on foreign investment. The Korean won was trading at 1,453.2 won against the U.S. dollar, down 3.4 won from the previous session.
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China's central bank is expanding the digital yuan's reach, launching a cross-border payment pilot with Singapore. The move aims to challenge the US dollar's dominance and internationalize the yuan.
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