Korean won back below 1,500 on easing tensions, but risks remain

Kospi rebounds after sharp drop, as oil-driven volatility persists

An electronic board at Hana Bank’s dealing room in central Seoul shows the Korean won at 1,495.4 per dollar shortly after the close of daytime trading Tuesday, with the Kospi at 5,553.92 points and the Kosdaq at 1,121.44. (Yonhap)

The South Korean won strengthened modestly Tuesday, supported by improved risk sentiment after US President Donald Trump signaled a five-day pause in potential strikes on Iranian energy infrastructure.

The won closed at 1,495.2 per dollar, improving by 22.1 won from the previous session. It marked the first time the currency finished below the 1,500 level in daytime trading since closing at 1,501 won on March 19.

The rebound followed a sharp drop to 1,517.3 per dollar in the prior session — its weakest level since March 9, 2009, during the global financial crisis. The currency had briefly strengthened into the 1,480 range in after-hours trading, closing at 1,486.7 after Trump’s remarks.

Volatility, however, persisted. The won weakened back past the 1,500 mark during intraday trading, touching 1,503 per dollar around noon, after Iran denied holding talks with the US.

“Even the mere prospect of an end to the war has boosted market sentiment, easing the sharp risk-off mood seen the previous day, though caution still lingers,” said Min Kyung-won, an economist at Woori Bank.

Local equities also rebounded as risk appetite improved.

The benchmark Kospi closed at 5,553.92, up 2.74 percent from the previous session, according to the Korea Exchange, after plunging 6.5 percent a day earlier.

The index opened at 5,638.2 and rose to an intraday high of 5,643 before retreating to a low of 5,395.17 after Iran denied dialogue with the US. It later regained momentum in afternoon trading to close above the 5,550 level.

Retail investors led the rebound, buying a net 722.7 billion won ($485 million) worth of shares and extending their strong buying streak after snapping up roughly 7 trillion won in the previous session. Institutional investors, initially net sellers, turned buyers in the afternoon with net purchases of 968.2 billion won.

Foreign investors continued to sell, offloading a net 1.99 trillion won. Their persistent outflows briefly pushed the Kospi into negative territory during intraday trading.

Heavyweight stocks rebounded. Samsung Electronics rose 1.83 percent, while SK hynix jumped 5.68 percent. Hyundai Motor and LG Energy Solution also gained 1.44 percent and 10.25 percent, respectively.

The tech-heavy Kosdaq also closed higher at 1,121.44, up 2.24 percent, mirroring the Kospi’s trajectory. It briefly slipped into negative territory during intraday trading before recovering in the afternoon.