South Korean shares crossed the 4,200-point threshold to close at an all-time high on Monday, lifted by gains banked in by shipbuilding, big-cap semiconductors, and electric power equipment companies. In particular, Nvidia's commitment to supply up to 260,000 units of AI chips to South Korea boosted markets.
The Korea Composite Stock Price Index or Kospi rose 114.37 points, or 2.8%, to end at 4,221.87. The Kosdaq also increased by 14.13 points, or 1.6%, to close at 914.55. Shares of major market movers such as Samsung Electronics (KRX:005930) and SK Hynix (KRX:000660) jumped over 3% and nearly 11% at market close.
In economic news, South Korea's manufacturing sector contracted in October, with the seasonally adjusted headline S&P Global South Korea Manufacturing Purchasing Managers' Index declining to 49.4 in October from 50.7 in September, S&P Global said in a Monday report.
A reading above 50 indicates an overall increase compared with the previous month, and below 50 indicates an overall decline.
The decline in the month was indicative of a slowdown in the manufacturing sector for the eighth time over the past nine months. In addition, manufacturing firms noted a sharp increase in operating expenses, which could be related to higher raw material prices sourced from overseas.
Firms saw contractions in both output and new order intakes, while employment levels fell partially for the first time in three months.
Purchasing activity also declined in October amid weak production needs and higher input costs, while the U.S. tariffs also left an impact. Still, some manufacturers stocked up materials to avoid future price hikes and supply issues, while shipping delays led to the sharpest lead-time increase since July.
"The positive signals for the South Korean manufacturing economy observed at the end of the third quarter largely evaporated in October. Output, new orders, and employment all returned to contraction territory, with firms highlighting weakness in the domestic economy," Usamah Bhatti, Economist at S&P Global Market Intelligence, said.
"Moreover, manufacturers noted that tariffs further impacted the sector, as new export orders fell into decline again, particularly emphasizing the decrease in US export demand," Bhatti said.
Looking ahead, manufacturers remained cautiously optimistic at the beginning of the fourth quarter, with confidence improving slightly from September but remaining below average. New product launches drove optimism, while worries over the domestic economy and tariff effects tempered sentiment.
In corporate news, LG CNS (KRX:064400) signed an agreement with Indonesia's Korindo Group to migrate its on-premise SAP ERP system to the cloud-based SAP S/4HANA platform, the South Korean AX specialist said in a Monday filing with the Korean Exchange.
The project marks the firm's first Southeast Asian project since joining SAP's Regional Strategic Services Partner initiative.
The project is expected to help Korindo, which deals in palm oil, logistics, and renewable energy, lower infrastructure management burdens and boost efficiency via standardized business processes.
Shares of LG CNS rose nearly 6% at market close.