On a Wednesday when Washington and Tehran agreed to a two-week pause in fighting and the reopening of the Strait of Hormuz, South Korea's stock market rose sharply, as if a nation that had absorbed the shock of distant conflict in its own prices finally felt the pressure ease. The rally, the fourth straight gain for the KOSPI, reflected a familiar human pattern: fear of a closed sea-lane and expensive oil gives way, briefly, to hope that the world's supply routes might breathe again. Yet the calm rests on a single diplomatic thread, and the observer must note that nothing has been settled, onl
Seoul Stocks Surge Nearly 7% as U.S. and Iran Agree to Two-Week Ceasefire and Hormuz Reopening
The turnaround could be equally strong
Mark
Seven percent in a day is huge for an index. What actually moved it?
Mimi
The ceasefire news and the Hormuz reopening. Crude fell below $100 a barrel, and the won strengthened by 33.6 to 1,470.6 per dollar.
Mark
Why would cheaper oil matter so much to Korea?
Mimi
One analyst, Lee Kyoung-min of Daishin, described Korea as having taken an all-out fallout from higher crude and geopolitical risk, so the reversal could be equally strong.
Luke
That is one analyst's reading, though. The article shows prices moving together, not why each investor bought.
Mark
The investor split looks odd. Foreigners and institutions bought, individuals sold.
Mimi
Foreigners bought a net 2.43 trillion won, institutions 2.71 trillion, and individuals sold 5.41 trillion. The source doesn't explain the individual selling.
Luke
Right, so any story about why retail sold would be speculation. It could be profit-taking, but nothing here says so.
Mark
Builders jumped by the daily limit. Is that about Iran's reconstruction?
Mimi
The report says that's the potential opportunity traders cited. Daewoo E&C rose 29.97 percent.
Luke
Note the word potential. No contracts are mentioned. And the ceasefire is two weeks, with Israel silent so far. The rally prices in a lot that isn't settled.
Le Pouls
- The KOSPI surged nearly seven percent in a single session, with gainers outnumbering losers more than seven to one.
- A buy-side sidecar was triggered early, forcing a pause as frenzied program buying threatened to outrun the market.
- Crude slipped below $100 a barrel after Trump called Iran's 10-point proposal a workable basis for talks.
- Construction and chip stocks soared on rebuilding and demand hopes, while refiners and defense shares sold off.
- Yet the rally hangs on whether Israel will halt its attacks, and a two-week window now opens with the outcome unclear.
On a Wednesday when Washington and Tehran agreed to a two-week pause in fighting and the reopening of the Strait of Hormuz, South Korea's stock market rose sharply, as if a nation that had absorbed the shock of distant conflict in its own prices finally felt the pressure ease. The rally, the fourth straight gain for the KOSPI, reflected a familiar human pattern: fear of a closed sea-lane and expensive oil gives way, briefly, to hope that the world's supply routes might breathe again. Yet the calm rests on a single diplomatic thread, and the observer must note that nothing has been settled, only postponed.
South Korea's main stock index closed Wednesday up 377.56 points, or 6.87 percent, at 5,872.34, after the United States and Iran agreed to a two-week ceasefire and the reopening of the Strait of Hormuz. It was the fourth straight session of gains for the KOSPI, and the floor was crowded with activity: some 926 million shares changed hands, and gainers outnumbered losers 782 to 106. Early in the day, the exchange briefly halted program-driven buy orders to cool the rush.
The trigger was diplomatic. President Donald Trump said Washington had received a 10-point proposal from Iran that he considered a workable basis for negotiation, and Iran's foreign ministry said safe passage through the waterway would be possible through coordination with its armed forces. Crude prices fell below $100 a barrel, and the won strengthened to 1,470.6 per dollar, while Treasury yields dropped.
The biggest names led the climb. Samsung Electronics and SK hynix surged, and Hyundai Motor and Kia advanced. Construction firms rallied on the prospect of rebuilding work in Iran, with Daewoo Engineering & Construction hitting its daily limit. Oil refiners and defense makers, by contrast, slipped as crude fell and the war premium eased.
Analysts welcomed the turnaround but warned against confidence. Israel has not said whether it will stop its attacks on Iran, and that silence could still pull the region back toward escalation. As the two-week window opens, Israel's response is the thing everyone is watching.
South Korea's main stock index closed Wednesday up 377.56 points, or 6.87 percent, at 5,872.34, after the United States and Iran agreed to a two-week ceasefire and the reopening of the Strait of Hormuz. It was the fourth straight session of gains for the Korea Composite Stock Price Index, known as KOSPI.
The session was busy. Some 926 million shares changed hands, worth 35.6 trillion won, or about $24.1 billion. Gainers outnumbered losers 782 to 106. Shortly after the opening bell, the exchange operator triggered a buy-side sidecar, which temporarily halts program-driven buy orders in KOSPI futures.
The investors behind the move were not uniform. Foreigners were net buyers of 2.43 trillion won, and institutions bought a net 2.71 trillion won. Individual investors went the other way, selling a net 5.41 trillion won.
The trigger was diplomatic. President Donald Trump announced that Washington had received a 10-point proposal from Iran, which he described as a workable basis on which to negotiate. Iran's foreign ministry issued its own statement saying safe passage through the waterway would be possible through coordination with Iran's Armed Forces, with due consideration of technical limitations. Global crude prices, including West Texas Intermediate, fell below $100 a barrel.
The currency moved with the stock market. At 3:30 p.m., the won was quoted at 1,470.6 per U.S. dollar, up 33.6 won from the previous session. Bond prices rose as well. The yield on three-year Treasurys fell 13.6 basis points to 3.315 percent, and the benchmark five-year yield dropped 14.7 basis points to 3.475 percent.
Among individual stocks, the biggest names led. Samsung Electronics gained 7.12 percent to 210,500 won, and SK hynix jumped 12.77 percent to 1,033,000 won. Hyundai Motor rose 7.4 percent to 508,000 won, and Kia added 5.57 percent to 159,200 won. Construction firms rallied on the prospect of rebuilding work in Iran: Daewoo Engineering & Construction rose by its daily limit of 29.97 percent to 22,500 won, and Hyundai Engineering & Construction climbed 21.04 percent to 188,700 won.
Other sectors fell. Oil refiners slipped as crude dropped, with SK Innovation down 1.15 percent to 120,400 won and S-Oil down 2.35 percent to 112,100 won. Defense shares also lost ground, with Hanwha Aerospace off 3.45 percent at 1,484,000 won and Hyundai Rotem down 2.13 percent at 206,500 won.
Lee Kyoung-min, a researcher at Daishin Securities, said South Korea had suffered an all-out fallout from geopolitical risks, including higher crude prices, and that the turnaround could be equally strong. Analysts nonetheless cautioned that uncertainty remains. Seo Sang-young of Mirae Asset Securities noted that Israel has not said whether it would stop attacks on Iran if the U.S. and Iran reach a ceasefire, and warned that this could lead to escalation driven by Israel. Israel's response is the thing to watch as the two-week window begins.
Citations marquantes
Israel has not yet responded on whether it would stop attacks on Iran if the U.S. and Iran reach a ceasefire; this may lead to an escalation of tensions led by Israel.— Seo Sang-young, analyst, Mirae Asset Securities
Trump called Iran's 10-point proposal a workable basis on which to negotiate.— President Donald Trump
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War & Conflict