South Korean Stocks Soar Amid Hopes for Strait of Hormuz Reopening
South Korean equities experienced a robust surge of nearly 3 percent on Friday, propelled by optimistic developments regarding the Strait of Hormuz. Discussions between Iran and Oman concerning a protocol to monitor traffic through the crucial waterway have significantly boosted hopes of easing global oil supply disruptions, despite lingering tensions in the Middle East. This positive sentiment also led to a sharp strengthening of the Korean won against the US dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) recorded an impressive gain of 143.25 points, or 2.74 percent, closing at 5,377.30. This strong performance marked a significant rebound following sharp losses in the preceding session.
Market Dynamics and Investor Activity
Trading volume on the day was moderate, with 1.12 billion shares exchanging hands, totaling a value of 22.13 trillion won (approximately $14.69 billion). Market breadth was positive, as gaining stocks outnumbered losers by a significant margin of 664 to 224.
Foreign and institutional investors were key drivers of the market’s ascent, collectively purchasing a net 814.57 billion won and 716.93 billion won worth of shares, respectively. Conversely, individual investors were net sellers, offloading 2.09 trillion won worth of shares.
Strait of Hormuz Protocol Fuels Optimism
The market’s rebound was primarily triggered by news that Tehran is actively drafting a protocol with Oman to monitor maritime traffic through the Strait of Hormuz. This initiative signals potential progress toward the vital waterway’s reopening, a development keenly watched by global energy markets.
The strategic Strait of Hormuz has faced effective closure since the outbreak of conflict in the Middle East in late February, a situation that has severely disrupted global oil supplies and consequently driven up international oil prices.
The urgency for resuming shipments through the Strait of Hormuz has intensified, with dozens of countries seeking solutions following US President Donald Trump’s warning of an “extremely hard” attack on Iran within two to three weeks. President Trump also urged nations reliant on this key shipping route for energy imports to “take care of” the situation themselves.
Seo Sang-young, a researcher at Mirae Asset Securities, commented on the situation: “Iran has stated that this measure is intended to ensure safety and improve services, suggesting that the blockade of the waterway may be easing.” This expert insight further bolstered investor confidence in a de-escalation of the maritime disruption.
Leading Shares: A Sectoral Performance Review
Performance among top-cap shares was mixed by the close of trading.
Technology giants led the gains, with market bellwether Samsung Electronics surging 4.37 percent to 186,200 won. Chip giant SK hynix also performed strongly, soaring 5.54 percent to 876,000 won.
Several other prominent companies saw positive movement: Defense giant Hanwha Aerospace climbed 2.26 percent to 1,449,000 won, while artificial intelligence investment firm SK Square went up 2.88 percent to 483,000 won. Nuclear power plant builder Doosan Enerbility also jumped 3.21 percent, reaching 96,600 won.
The shipbuilding sector showed robust performance, with local industry leader HD Hyundai Heavy spiking 9.23 percent to 479,000 won, and its competitor Hanwha Ocean advancing 7.29 percent to 128,000 won.
Carmakers presented a mixed picture: Top automaker Hyundai Motor advanced 1.18 percent to 471,000 won, but its affiliate Kia saw a slight dip of 0.27 percent, closing at 150,200 won.
Conversely, some major players experienced declines: Leading battery maker LG Energy Solution fell 1.48 percent to 398,500 won, bio giant Samsung Biologics lost 1.96 percent to 1,554,000 won, and leading financial firm KB Financial shed 0.68 percent to 145,500 won.
