South Korean stocks surged more than three percent on Monday, buoyed by optimism about the government’s proposed dividend tax reform.

The benchmark Korea Composite Stock Price Index rose 119-point-48 points, or three-point-02 percent, on Monday to close at four-thousand-73-point-24.

Investors stepped in after last week’s market decline amid concerns about a potential bubble in the artificial intelligence sector.

Market sentiment improved on expectations that the government’s dividend tax reform would encourage payouts by listed companies and boost the stock market.

The government and the ruling party agreed on Sunday to lower the proposed top dividend tax rate from the initial 35 percent.

Leading the gains Monday were financial companies, with KB Financial gaining four-point-28 percent and SK Square jumping three-point-94 percent.

Tech giants also advanced, with Samsung Electronics and SK hynix rising two-point-76 and four-point-48 percent, respectively.

The tech-heavy KOSDAQ gained eleven-point-54 points, or one-point-32 percent, to close at 888-point-35.
 
The South Korean won strengthened against the U.S. dollar by five-point-five won, trading at one-thousand-451-point-four won as of 3:30 p.m.