South Korean stocks experienced a remarkable rally, surging by nearly 7 percent, following news of a two-week ceasefire agreement between the United States and Iran. This pivotal development, which also included the reopening of the crucial Strait of Hormuz, triggered a sharp decline in global crude prices and significantly boosted the Korean won’s value against the US dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) closed with an impressive gain of 377.56 points, or 6.87 percent, reaching 5,872.34. This strong performance marked its fourth consecutive session of growth, reflecting renewed investor confidence in the South Korean market.
Trading activity was exceptionally robust, with a total volume of 926 million shares changing hands, amounting to 35.6 trillion won ($24.1 billion). Market breadth was overwhelmingly positive, as advancing stocks considerably outnumbered declining ones, with 782 gainers against just 106 losers.
Foreign investors played a significant role in the upswing, purchasing a net 2.43 trillion won. Institutions also showed strong buying interest, acquiring a net 2.71 trillion won, while individual investors took profits, divesting a net 5.41 trillion won.
Early in the trading day, the bourse operator proactively activated a buy-side sidecar. This mechanism temporarily halted program-driven buy orders in KOSPI futures, ensuring market stability amidst the rapid surge.
The positive sentiment stemmed from an announcement by US President Donald Trump, who confirmed that the United States had received a comprehensive 10-point proposal from Iran. President Trump described the proposal as a “workable basis on which to negotiate” a lasting peace.
Further reinforcing optimism, Iran’s foreign ministry issued a statement confirming that “safe passage” through the strategically vital Strait of Hormuz would become “possible via coordination with Iran’s Armed Forces and with due consideration of technical limitations,” signaling eased tensions in the critical shipping lane.
Consequent to these geopolitical breakthroughs, global crude oil prices, including the widely tracked West Texas Intermediate (WTI), promptly fell below the $100 per barrel mark, alleviating a major concern for energy-importing nations like South Korea.
“South Korea has been particularly vulnerable to the widespread fallout from geopolitical risks, especially the spike in global crude prices. This turnaround could therefore lead to an equally strong rebound for the economy and financial markets,” remarked Lee Kyoung-min, a respected researcher at Daishin Securities, highlighting the potential for sustained recovery.
Despite the substantial gains, market analysts caution that uncertainties may persist, primarily due to Israel’s continued silence on the ceasefire agreement between the US and Iran.
Seo Sang-young, an analyst at Mirae Asset Securities, emphasized this concern, stating, “Israel has not yet responded on whether it would stop attacks on Iran if the US and Iran reach a ceasefire. This unresolved aspect could potentially lead to an escalation of tensions orchestrated by Israel.”
Key market players demonstrated significant strength. Technology bellwether Samsung Electronics surged by 7.12 percent to 210,500 won, while chip giant SK Hynix saw an even more dramatic rise, soaring 12.77 percent to 1,033,000 won.
The automotive sector also performed strongly, with top carmaker Hyundai Motor climbing 7.4 percent to 508,000 won, and its affiliate Kia adding 5.57 percent, reaching 159,200 won.
Construction companies experienced notable gains, fueled by speculation of potential reconstruction opportunities in Iran. Daewoo Engineering & Construction surged by its daily permissible limit of 29.97 percent to 22,500 won, and Hyundai Engineering & Construction increased an impressive 21.04 percent to 188,700 won.
Conversely, oil refiners faced downward pressure as global crude prices plummeted after the ceasefire announcement. SK Innovation registered a loss of 1.15 percent, falling to 120,400 won, and S-Oil slid 2.35 percent, closing at 112,100 won.
Defense sector shares were also among the day’s losers, reflecting diminished geopolitical tensions. Hanwha Aerospace declined 3.45 percent to 1,484,000 won, and Hyundai Rotem surrendered 2.13 percent, ending the session at 206,500 won.
