Park Han-sol reports on Korea's financial regulators, along with fintech and insurance. She previously wrote about the art world, from biennales and exhibitions to fairs and auctions, with a focus on Seoul and the figures shaping the scene. Before joining The Korea Times, she spent a year at ABC News' Seoul bureau, contributing to coverage of major Asia-Pacific events.
Seoul stocks surge as US-Iran breakthrough boosts risk appetite
A stock ticker in the dealing room of Hana Bank headquarters in Seoul shows the benchmark KOSPI finishing at 8,545.98, up 5.2 percent from the previous session's close, Monday. Yonhap
By Park Han-sol
Won strengthens against dollar, oil prices fall
Korean stocks surged Monday after the United States and Iran reached a preliminary agreement over the weekend that includes the reopening of the Strait of Hormuz, removing one of the biggest sources of uncertainty that had weighed on global markets for more than three months.
The agreement effectively brings an end to the 106-day conflict that began on Feb. 28, with a formal signing ceremony scheduled for Friday in Switzerland.
“The Deal with the Islamic Republic of Iran is now complete,” U.S. President Donald Trump wrote on Truth Social before Asian markets opened. “I hereby fully authorize the toll free opening of the Strait of Hormuz ... Ships of the World, start your engines. Let the oil flow!”
On the news, international crude prices fell back toward the $80 range as fears of supply disruptions eased. Brent crude, the global benchmark, and U.S. West Texas Intermediate crude both dropped over 4 percent to $83.53 and $80.58 per barrel, respectively.
While still well above pre-Iran war levels, prices have retreated sharply from the peaks above $110 reached during the height of the conflict.
The relief rally quickly spilled over into Korean equities.
The benchmark KOSPI opened high at 8,526.12, up 4.95 percent from the previous session. Just six minutes after the opening bell, a buy-side sidecar was triggered — a market safeguard that temporarily suspends program buy orders during periods of extreme volatility. The index ultimately closed at 8,545.98, up 5.2 percent.
With risk appetite returning, investors piled into the country’s semiconductor heavyweights. SK hynix rose 6.42 percent to close at 2,288,000 won, while Samsung Electronics gained 4.5 percent to finish at 337,000 won. Other large-cap technology names also rallied, with Samsung Electro-Mechanics jumping 16.63 percent to 1,999,000 won.
“The Korean market’s earnings-driven rally never really ended in June. It was merely overshadowed by concerns over interest rates and geopolitics,” said Kim Doo-eun, an analyst at Hana Securities. “Lower oil prices and easing inflation premiums should reduce pressure on discount rates and redirect attention back to earnings. The market’s primary driver remains corporate profits once again, with memory semiconductors at the center.”
The secondary bourse Kosdaq also advanced, though gains were far more modest. The index opened at 1,048.19, up 1.86 percent, and extended gains throughout the session to close at 1,034.03, up 0.48 percent.
Iran deal removes one hurdle, others remain
Despite the breakthrough in the U.S.-Iran negotiations, Korea’s financial market is still grappling with a number of headwinds. One of the most immediate concerns remains the won-dollar exchange rate.
In Seoul’s foreign exchange market, the Korean won strengthened 8.7 won to close at 1,511.1 per U.S. dollar. While marking its lowest closing level since June 1, the currency remains firmly above the psychologically important 1,500-won threshold, continuing to weigh on the broader economic outlook.
Investors are also bracing for a busy week of central banks' decisions, with both the Bank of Japan and the U.S. Federal Reserve set to announce policy outcomes.
The Bank of Japan is widely expected to raise its policy rate by 25 basis points to 1 percent on Tuesday from the current 0.75 percent. If realized, the move would bring Japanese interest rates to their highest level since 1995.
Attention will then shift to the Federal Reserve, which begins its two-day Federal Open Market Committee meeting on Wednesday. While the Fed is expected to leave rates unchanged, investors are closely watching the first meeting under Chair Kevin Warsh, amid expectations that the central bank could adopt a more hawkish tone.
Current market pricing suggests the Fed could deliver one additional quarter-point rate hike before the end of the year.
“Given the realities of the past several months — including the war, elevated oil prices and inflation pressures — we expect changes to the June FOMC statement, dot plot and economic projections,” said Kim Ji-na, an analyst at Eugene Investment & Securities.
“The inflation already generated by the conflict will not disappear overnight. Even if oil prices retreat, there is typically a lag before supply-side inflation pressures fully normalize, making adjustments to the monetary policy outlook difficult to avoid," Kim said.