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Kospi rallies to rise 6.6% to 2,445.06 on tariff pause

Published: 10 Apr. 2025, 17:17 Updated: 10 Apr. 2025, 19:22

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,445.06 points on April 10, up 151.36 points, or 6.6 percent, from the previous trading session. [NEWS1]

Shares rebounded sharply on Thursday to snap a four-day losing streak after U.S. President Donald Trump announced a temporary suspension of reciprocal tariffs and a sharp overnight rally on Wall Street.

Korea’s benchmark Kospi jumped 6.6 percent to close at 2,445.06, recovering from a sharp drop below 2,300 the previous day, its lowest level in 17 months. The index opened 4.42 percent higher and extended gains throughout the session, triggering a sidecar — a temporary halt in program trading — just six minutes into trading as Kospi 200 futures surged nearly 6 percent.

It is the first time the buy-side sidecar has been activated on the Kospi since Aug. 6 last year, when markets rebounded after a global sell-off.

Foreign and institutional investors drove the day’s rally, purchasing 324.4 billion won ($222.2 million) and 676.2 billion won worth of stocks, respectively. In contrast, retail investors offloaded a net 1.07 trillion won, reversing their recent trend of absorbing foreign outflows.

The tech-heavy Kosdaq gained 5.97 percent to 681.79. A sidecar was triggered around 10:46 a.m. as Kosdaq 150 futures and the index surged. Foreigners and institutions were net buyers of 107.4 billion won and 201.1 billion won, respectively, while retail investors sold 299.3 billion won.

Large-cap shares led the rally. LG Energy Solution soared 11.31 percent, SK hynix climbed 11.03 percent and Samsung Electronics rose 6.42 percent. On the Kosdaq, Classys jumped 11.65 percent, EcoPro added 9.62 percent, and Hugel gained 7.75 percent.

U.S. President Donald Trump speaks as he signs executive orders and proclamations in the Oval Office at the White House in Washington on April 9. [REUTERS/YONHAP]

The rally followed U.S. President Trump’s announcement of a 90-day postponement of reciprocal tariffs. For Korea, tariffs on certain exports will drop to 10 percent from 25 percent during the grace period, except for key sectors like automobiles and steel where the 25 percent rate remains.

Overnight, U.S. stocks posted strong gains, with the Nasdaq Composite up 12 percent, the S&P 500 rising 9.52 percent, and the Dow Jones Industrial Average adding 7.87 percent. Asian markets tracked the momentum. Japan’s Nikkei 225 surged 9.13 percent to 34,609, boosted by the rally in U.S. tech stocks. Shares of Nvidia surged 18.72 percent, Tesla jumped 22.69 percent, and Apple rose 15.33 percent, helping lift both Korean and Japanese stocks.

“Foreign investors who had been offloading Korean shares due to tariff concerns are now buying again,” said Lee Jae-won, an analyst at Shinhan Investment.

“The Kosdaq has also rebounded from oversold levels, helped by bargain-hunting. But tariffs on auto and steel are still in place, and attention will now turn to U.S. inflation and first-quarter earnings in both Korea and the United States,” Lee added.

Meanwhile, the won strengthened sharply. The local currency traded at 1,456.4 won against the dollar at 3:30 p.m., down 27.7 won from the previous session.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.

BY KO SUK-HYUN [[email protected]]