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Updated 13:04 IST, July 4th 2024

South Korean shares hit over 29-month high, Samsung Electronics shines

SK Hynix, a supplier of high-end chips to Nvidia, fell 2.54%, despite Nvidia's 4.6% overnight gain.

Reported by: Business Desk
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Stock market | Image: Pixabay

South Korean financial markets saw significant gains on Thursday, with shares reaching their highest level in more than 29 months. The rise was led by a surge in Samsung Electronics ahead of its second-quarter earnings report, along with strength in auto and financial stocks driven by policy measures encouraging higher dividend payouts.

The benchmark KOSPI closed up 30.93 points, or 1.11 per cent, at 2,824.94, marking its highest level since January 21, 2022. Samsung Electronics rose 3.42 per cent, anticipating a significant profit increase due to rising demand for artificial intelligence technology. The company is expected to announce a 13-fold increase in profit.

SK Hynix, a supplier of high-end chips to Nvidia, fell 2.54 per cent, despite Nvidia's 4.6 per cent overnight gain. A local media report suggested Samsung's high-end chips passed Nvidia's test for use, but Samsung refuted the accuracy of the report.

Analyst Park Kwang-nam from Mirae Asset Securities noted that if Samsung supplies high bandwidth memory chips to Nvidia, it could impact SK Hynix's exclusive supplier status.
Sector Performance:

Financial sub-indexes showed significant gains: the finance-major index rose 1.80 per cent, the securities-minor index climbed 3.21 per cent, and the insurance index jumped 2.21 per cent. The transport equipment index increased by 1.20 per cent. Auto and financial stocks were highlighted as potential higher dividend payers, supported by government tax exemptions aimed at boosting dividends.

A Bank of Korea official suggested that South Korea should address the high cost of living through structural reforms rather than relying solely on the central bank's measures. Foreign investors were net buyers of shares worth 321.6 billion won ($232.90 million).

The Korean won strengthened against the dollar, quoted at 1,380.4 per dollar on the onshore settlement platform, up 0.39 per cent from its previous close of 1,385.8. The yield on the most liquid three-year Korean treasury bond fell by 3.8 basis points to 3.125 per cent, while the benchmark 10-year yield dropped by 4.9 basis points to 3.230 per cent. South Korean shares are on a bullish trend, driven by robust performance in key sectors and positive investor sentiment ahead of major earnings announcements.

(With Reuters inputs.)

Published 13:04 IST, July 4th 2024