SEOUL, September 08 (AJP) - South Korean KOSPI climbed above 7,100 Tuesday morning as construction and nuclear power shares surged on expectations that Korea might invest in the United States' major power projects.
The benchmark KOSPI stood at 7,112.63 as of 10:45 a.m., up 1.7 percent from the previous session. The index rose as high as 7,115.92 after touching an intraday low of 7,018.53.
The move took the index firmly above both the 7,000 and 7,100 levels after it closed at 6,995.39 on Monday.
Institutional investors bought 402.2 billion won ($300 million) worth of shares, as foreign investors followed with 78.7 billion won worth of purchase. However, the retail investors sold 947.9 billion won.
Construction and power-related stocks were the heavy performers.
The construction sector jumped 4.9 percent, while electric utilities gained 4.8 percent, both sharply outperforming the broader market.
Daewoo Engineering & Construction surged 12.2 percent to 20,650 won. KEPCO Engineering & Construction climbed 11.5 percent, while Doosan Enerbility gained 4.2 percent to 91,600 won.
Buying also spread across smaller nuclear-related shares. Orbitech jumped 21.9 percent and Woori Technology rose 6.96 percent.
The rally followed reports that Korea and the United States are discussing power infrastructure projects as part of Seoul's $350 billion U.S. investment commitment.
The discussions reportedly include the possible construction of up to eight large nuclear reactors in the United States. Reports have suggested that as much as $120 billion of the $200 billion investment pool excluding shipbuilding could eventually be directed toward nuclear projects.
South Korea is also considering a large gas-fired power project in Encinal, Texas, to meet growing electricity demand from semiconductor plants and AI data centers.
No final agreement on the nuclear projects has been announced, however, and key details including reactor types, project locations, construction schedules and participating companies remain unsettled.
The uncertainty has not stopped investors from betting on Korean companies that could participate in U.S. power projects.
Doosan Enerbility is considered a potential beneficiary because it can supply equipment for both Korea's APR1400 reactor and Westinghouse's AP1000 design. Construction companies could also benefit depending on how engineering, procurement and construction contracts are allocated.
Semiconductor shares provided another pillar of support for the KOSPI.
SK hynix rose 3.5 percent to 1,846,000 won, while Samsung Electronics gained 1.8 percent to 274,750 won.
Chip stocks have extended gains following OpenAI's unveiling of its latest AI model Astra, which has strengthened expectations that increasingly computing-intensive AI services will drive further demand for high-bandwidth memory, DRAM and other memory products.
Jusung Engineering also jumped 7.9 percent to 202,000 won.
The tech-heavy KOSDAQ was more subdued, rising 0.45 percent to 825.90. It traded between 820.58 and 830.05.
Retail investors bought 102.8 billion won on the junior market, while foreign investors sold 9 billion won and institutions followed with 94.3 billion won of sale.
The Korean won strengthened alongside equities. The won traded at 1,339.1 against the U.S. dollar, up about 0.6 percent.
Oil prices remained elevated amid renewed tensions between the United States and Iran around the Strait of Hormuz. U.S. crude traded around $92.30 a barrel and Brent crude at $97.05, keeping energy supply risks in focus.
Meanwhile, Japan's Nikkei 225 rose 0.3 percent to 66,567.12 and China's Shanghai Composite gained 0.34 percent to 3,945.99. Hong Kong's Hang Seng Index fell 0.6 percent to 25,253.93.
AJP Takeaways
- KOSPI tops 7,100: The benchmark rose 1.7 percent to 7,112.63 as institutional and foreign buying outweighed heavy retail selling.
- Nuclear, construction lead gains: Construction and electric utility shares jumped nearly 5 percent on expectations that Seoul's U.S. investment package could include large-scale nuclear and power projects.
- Chips add support: SK hynix gained 3.5 percent and Samsung Electronics rose 1.8 percent as AI-driven memory demand optimism continued.
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