Seoul Shares Rise on Tech Sector Growth Amidst Anticipation of Earnings Reports

by Arthur Herring
in *JP, News, PC, xHU, xLT, xRO
on 21 November 2023

Seoul shares closed higher on Tuesday, driven by gains in the technology sector and optimism surrounding upcoming earnings reports. Investors eagerly awaited the financial performance of leading AI chip manufacturer Nvidia and other major US tech companies.

The benchmark Korea Composite Stock Price Index rose by 0.8 percent, closing at 2,510.42 points. Trade volume remained moderate, with 340.42 million shares worth 7.6 trillion won ($5.9 billion) traded. Gainers outnumbered losers, with 598 stocks gaining while 271 recorded losses.

In the US, the Dow Jones Industrial Average increased by 0.6 percent to reach 35,151.04 points, while the tech-rich NASDAQ added 1.1 percent to close at 14,284.53 points.

Both local and foreign institutions showed strong buying activity, collectively purchasing 461 billion won worth of stocks. This exceeded individuals’ stock selling valued at 438 billion won.

Nvidia’s upcoming quarterly results were highly anticipated due to the strong demand for generative AI technology. Investors were also eager to analyze the minutes of the Federal Reserve’s November 1 policy meeting and the US existing home sales data, seeking insights into the central bank’s future rate plans.

Market watchers expressed initial concerns over potential future rate hikes by the Federal Reserve to combat rising inflation. However, the sentiment appears to have shifted, with expectations now leaning towards a possible rate cut as early as March next year. Factors contributing to this shift include reduced hiring by US companies and a slowing pace of wage growth.

Tech stocks were the primary gainers in Seoul, with major players like Samsung Electronics, SK hynix, SK Telecom, and LG Energy Solution experiencing positive movement.

However, some companies experienced declines, including Korea Aerospace Industries, Kia Motors, and Hanwha Ocean.

The Korean won strengthened against the US dollar, closing at 1,289.2 won, marking a gain of 2.4 won from the previous session’s close.

Frequently Asked Questions (FAQ)

1. What contributed to the rise in Seoul shares on Tuesday?
2. Which US tech company’s financial performance was eagerly awaited by investors?
3. What was the closing value of the Korea Composite Stock Price Index?
4. How was the trade volume on Tuesday?
5. Did gainers outnumber losers in the stock market?
6. What were the gains in the US stock market?
7. Who showed strong buying activity in the Korean stock market?
8. What were investors’ expectations for the Federal Reserve’s future rate plans?
9. What were the factors contributing to a possible rate cut expectation?
10. Which sectors experienced positive movement in the Seoul stock market?
11. Which companies experienced declines in the stock market?
12. How did the Korean won perform against the US dollar on Tuesday?

Key Terms/Jargon:
1. Korea Composite Stock Price Index – Also known as KOSPI, it is the representative stock market index of South Korea, tracking the performance of the country’s largest companies listed on the Korea Exchange.
2. AI Chip – A specialized semiconductor chip designed for artificial intelligence tasks, such as machine learning and deep learning algorithms.
3. Nvidia – A leading American multinational technology company specializing in the design and manufacture of graphics processing units (GPUs) and AI chips.
4. Federal Reserve – The central banking system of the United States, responsible for the formulation and implementation of monetary policy.
5. Rate Cut – A reduction in the interest rates set by the central bank, aimed at stimulating economic growth by making borrowing cheaper.
6. Inflation – The rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling.