Biden's summit with Yoon to boost chip, battery, nuclear power stocks

From left are President Yoon Suk-yeol and U.S. President Joe Biden. AFP-Yonhap

By Lee Min-hyung

Stocks related with chip, battery and nuclear energy closed Friday with a gain on growing expectations for the upcoming first summit between President Yoon Suk-yeol and U.S. President Joe Biden.

The benchmark KOSPI achieved a rare rally by closing at 2,639.29, up 1.81 percent from the previous day, on a buying spree of overseas and institutional investors.

With Biden starting his business trip to Korea at a Samsung Electronics chip plant in Pyeongtaek, Gyeonggi Province, Friday, investors regained their confidence particularly in some stocks that will benefit from the much-anticipated meeting between the two leaders.

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Korea's large-cap tech stocks have in particular bounced back on expectations that the two countries will be able to tighten their partnership in the semiconductor and secondary battery industries.

Shares of Samsung Electronics closed with a gain of 0.74 percent at 68,000 won, with SK hynix, the nation's second-largest chipmaker, achieving a bigger gain of 1.35 percent during the same period.

Major battery stocks showed even more outstanding stock performances. Shares of LG Energy Solution, one of the world's leading electric vehicle battery manufacturers, soared by 4.45 percent, on hopes surrounding Yoon's first face-to-face meeting with Biden.

Economic security is high on the agenda for the upcoming summit, amid lingering woes over global supply chain bottlenecks during the pandemic.

"Depending on the results of the summit, small- to medium-cap stocks in the chip and battery sectors will also react," Shinhan Financial Investment analyst Choi Yoo-joon said. "But as the industries make up a significant portion of the local securities market, investors are advised to pay more attention to how the summit will affect their future growth from a medium- to longer-term perspective."

Nuclear power stocks also went on a rally, as expectations are that the Yoon administration will seek progress in its ties with the U.S. in the nuclear energy business.

Shares of Doosan Enerbility, a supplier of nuclear power plant components, enjoyed a rally with a gain of 4.04 percent from the previous day. Other state-run firms in related businesses ― such as KEPCO KPS and KEPCO E&C ― also achieved bigger gains of 5.78 and 6.49 percent, respectively.

Hyundai Motor Group shares also rose by 2.47 percent on the last trading day of the week, with expectations high for the meeting between Biden and the group's Chairman Chung Euisun scheduled for Sunday. Biden is reportedly set to express gratitude to the Hyundai leader for its decision to invest $7 billion Georgia to build an electric vehicle factory in the U.S. state of Georgia.

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