South Korean financial markets experienced a significant surge on Monday morning, with stocks opening sharply higher following news of a landmark agreement between the United States and Iran. This peace deal aims to conclude their prolonged conflict in the Middle East, critically including the vital reopening of the Strait of Hormuz, a crucial global shipping lane.
The benchmark Korea Composite Stock Price Index (KOSPI) witnessed a robust rally, climbing 407.79 points, or 5.02 percent, to reach 8,531.41 by 9:15 a.m. local time, signaling strong investor confidence.
Such an aggressive ascent prompted the Seoul bourse operator to promptly issue a buy-side sidecar, a market stabilization measure that temporarily halted program trading for five minutes shortly after the opening bell.
The breakthrough was announced Sunday (local time) by Pakistan, confirming that the US and Iran had finalized an agreement to end the war and facilitate the reopening of the Strait of Hormuz. This strategic waterway, a primary conduit for global energy supplies, had been effectively closed by Iran for several months, causing extreme market volatility. The news brought considerable relief to investors worldwide.
US President Donald Trump further corroborated the successful negotiation of the deal. He announced authorization for a toll-free reopening of the Strait and an immediate lifting of the Navy blockade previously in place.
While comprehensive details of the US-Iran accord are yet to be fully disclosed, a formal signing ceremony is scheduled to take place this Friday in Switzerland.
Global oil prices reacted swiftly to the peace deal, experiencing a notable decline. Brent crude, the international benchmark for oil, dropped by 3.37 percent to settle at $87.3 per barrel. This marks a significant retreat from figures near $100 per barrel observed in early May, reflecting reduced geopolitical risk premiums.
Across the board in Seoul, major South Korean companies saw their shares gather substantial ground.
Market leader Samsung Electronics recorded a 4.96 percent increase, while its semiconductor rival SK Hynix advanced by 6.65 percent. Leading automaker Hyundai Motor surged 6.75 percent, shipbuilding titan HD Hyundai Heavy Industries jumped an impressive 9.54 percent, and defense industry giant Hanwha Aerospace inched up 0.74 percent, illustrating the broad-based positive market sentiment.
