(Source:Wikimedia Commons)
By Aubrey Kim, New York Correspondent
Easing U.S. Tariff Uncertainty Boosts Investor Sentiment
On May 26, 2025, South Korea’s stock market posted a sharp rebound after the Trump administration in the U.S. announced a postponement of its planned tariffs on European Union (EU) imports. The benchmark KOSPI closed at 2,644.40, up 2.02% or 52.31 points from the previous session, reclaiming the 2,640 level. The tech-heavy KOSDAQ also gained 1.30% to finish at 725.27.
The rally was driven by a combination of eased trade tensions stemming from the U.S. and strong net buying by both foreign and institutional investors. President Trump had previously threatened to impose 50% tariffs on selected EU goods starting June 1, but has now pushed the deadline to July 9. This move temporarily calmed global trade war fears and significantly improved investor sentiment.
Foreign and Institutional Buying Drives Market Rally; Retail Investors Take Profits
On the main KOSPI board, foreign investors were net buyers of 101.9 billion KRW, while institutions bought a net 430.2 billion KRW. In contrast, retail investors offloaded 513.9 billion KRW worth of shares, locking in profits. A similar pattern was seen on the KOSDAQ, where foreigners and institutions net bought 85.3 billion KRW and 86.2 billion KRW, respectively, while retail investors sold 164.4 billion KRW.
The synchronized buying by foreign and institutional investors is seen as a response to stabilizing domestic political conditions, expectations for stock market support measures, and optimism over increased capital inflows amid a stronger Korean won.
EV Battery, Shipbuilding, and Semiconductor Stocks Lead the Gains
By sector, electric vehicle (EV) battery, shipbuilding, and semiconductor stocks led the rally. EV battery makers such as LG Energy Solution (+3.73%) and POSCO Holdings (+3.43%) posted solid gains. Shipbuilders like HD Hyundai Heavy Industries (+6.04%), Hanwha Ocean (+3.82%), and HD Korea Shipbuilding & Offshore Engineering (+2.77%) also rose sharply.
The gains were fueled by news that a major German container shipping company is considering awarding orders to South Korean shipbuilders instead of Chinese firms—boosting expectations of Korea benefiting from U.S. sanctions on China.
Semiconductor stocks, which initially dropped due to concerns over potential smartphone tariffs, rebounded on bargain hunting during the session. Samsung Electronics rose 0.92%, and SK hynix gained 1.50%. Meanwhile, KB Financial Group (+3.03%) surpassed Hanwha Aerospace to become the fifth-largest company by market capitalization. In total, about 70% of KOSPI-listed stocks closed higher.
Korean Won Hits 7-Month High Amid Dollar Weakness
In the Seoul foreign exchange market, the Korean won appreciated significantly, with the USD/KRW exchange rate falling 11.2 won to close at 1,364.4—its lowest level since October 16 of last year. The won's strength is attributed to a combination of factors including rising concerns over a potential U.S. credit rating downgrade, the passage of large-scale U.S. tax cuts increasing federal debt risks, and Trump’s reversal on tariff policy, which led to a sharp drop in the U.S. dollar.
Experts expect the trend of dollar weakness and won strength to continue in the near term. Key variables influencing exchange rate movements include Korea–U.S. currency negotiations, the resolution of domestic political uncertainties, and global trade developments.
Market Outlook: Potential for Further Gains, But Risks Remain
Market analysts believe that the recent KOSPI surge may have legs, particularly if domestic political stability continues and foreign capital inflows accelerate in the second half of the year. Both major presidential candidates—Lee Jae-myung of the Democratic Party and Kim Moon-soo of the People Power Party—have expressed strong commitments to closing the “Korea Discount,” suggesting positive implications for the stock market regardless of the election outcome.
However, risks remain. Trump’s tariff policy remains unpredictable, and volatility in global tech stocks as well as ongoing smartphone tariff concerns could continue to impact markets. Experts caution that while investor sentiment has improved temporarily due to the tariff delay, vigilance is still needed regarding external risks such as the U.S. election and global trade dynamics.
Conclusion
South Korea’s stock market surged more than 2% on May 26, regaining the 2,640 level, as investor sentiment improved following the Trump administration’s delay of planned EU tariffs. The rally was fueled by foreign and institutional buying, strength in EV battery, shipbuilding, and semiconductor stocks, and a strengthening Korean won. However, lingering uncertainties in global trade policy and exchange rate volatility remain key risks, and investors are advised to approach the market with caution.
Copyright © The Value Chain Times. All rights reserved. Unauthorized reproduction, redistribution, and use for AI training are strictly prohibited.
[The Value Chain Times = Aubrey Kim, New York Correspondent]
By Aubrey Kim, New York Correspondent
Easing U.S. Tariff Uncertainty Boosts Investor Sentiment
On May 26, 2025, South Korea’s stock market posted a sharp rebound after the Trump administration in the U.S. announced a postponement of its planned tariffs on European Union (EU) imports. The benchmark KOSPI closed at 2,644.40, up 2.02% or 52.31 points from the previous session, reclaiming the 2,640 level. The tech-heavy KOSDAQ also gained 1.30% to finish at 725.27.
The rally was driven by a combination of eased trade tensions stemming from the U.S. and strong net buying by both foreign and institutional investors. President Trump had previously threatened to impose 50% tariffs on selected EU goods starting June 1, but has now pushed the deadline to July 9. This move temporarily calmed global trade war fears and significantly improved investor sentiment.
Foreign and Institutional Buying Drives Market Rally; Retail Investors Take Profits
On the main KOSPI board, foreign investors were net buyers of 101.9 billion KRW, while institutions bought a net 430.2 billion KRW. In contrast, retail investors offloaded 513.9 billion KRW worth of shares, locking in profits. A similar pattern was seen on the KOSDAQ, where foreigners and institutions net bought 85.3 billion KRW and 86.2 billion KRW, respectively, while retail investors sold 164.4 billion KRW.
The synchronized buying by foreign and institutional investors is seen as a response to stabilizing domestic political conditions, expectations for stock market support measures, and optimism over increased capital inflows amid a stronger Korean won.
EV Battery, Shipbuilding, and Semiconductor Stocks Lead the Gains
By sector, electric vehicle (EV) battery, shipbuilding, and semiconductor stocks led the rally. EV battery makers such as LG Energy Solution (+3.73%) and POSCO Holdings (+3.43%) posted solid gains. Shipbuilders like HD Hyundai Heavy Industries (+6.04%), Hanwha Ocean (+3.82%), and HD Korea Shipbuilding & Offshore Engineering (+2.77%) also rose sharply.
The gains were fueled by news that a major German container shipping company is considering awarding orders to South Korean shipbuilders instead of Chinese firms—boosting expectations of Korea benefiting from U.S. sanctions on China.
Semiconductor stocks, which initially dropped due to concerns over potential smartphone tariffs, rebounded on bargain hunting during the session. Samsung Electronics rose 0.92%, and SK hynix gained 1.50%. Meanwhile, KB Financial Group (+3.03%) surpassed Hanwha Aerospace to become the fifth-largest company by market capitalization. In total, about 70% of KOSPI-listed stocks closed higher.
Korean Won Hits 7-Month High Amid Dollar Weakness
In the Seoul foreign exchange market, the Korean won appreciated significantly, with the USD/KRW exchange rate falling 11.2 won to close at 1,364.4—its lowest level since October 16 of last year. The won's strength is attributed to a combination of factors including rising concerns over a potential U.S. credit rating downgrade, the passage of large-scale U.S. tax cuts increasing federal debt risks, and Trump’s reversal on tariff policy, which led to a sharp drop in the U.S. dollar.
Experts expect the trend of dollar weakness and won strength to continue in the near term. Key variables influencing exchange rate movements include Korea–U.S. currency negotiations, the resolution of domestic political uncertainties, and global trade developments.
Market Outlook: Potential for Further Gains, But Risks Remain
Market analysts believe that the recent KOSPI surge may have legs, particularly if domestic political stability continues and foreign capital inflows accelerate in the second half of the year. Both major presidential candidates—Lee Jae-myung of the Democratic Party and Kim Moon-soo of the People Power Party—have expressed strong commitments to closing the “Korea Discount,” suggesting positive implications for the stock market regardless of the election outcome.
However, risks remain. Trump’s tariff policy remains unpredictable, and volatility in global tech stocks as well as ongoing smartphone tariff concerns could continue to impact markets. Experts caution that while investor sentiment has improved temporarily due to the tariff delay, vigilance is still needed regarding external risks such as the U.S. election and global trade dynamics.
Conclusion
South Korea’s stock market surged more than 2% on May 26, regaining the 2,640 level, as investor sentiment improved following the Trump administration’s delay of planned EU tariffs. The rally was fueled by foreign and institutional buying, strength in EV battery, shipbuilding, and semiconductor stocks, and a strengthening Korean won. However, lingering uncertainties in global trade policy and exchange rate volatility remain key risks, and investors are advised to approach the market with caution.
Copyright © The Value Chain Times. All rights reserved. Unauthorized reproduction, redistribution, and use for AI training are strictly prohibited.
[The Value Chain Times = Aubrey Kim, New York Correspondent]