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KOSPI climbs for 4th session on ceasefire optimism, though momentum weakens
KOSPI is displayed at the dealing room of Hana Bank in Seoul, Tuesday. The benchmark index closed at 8,726.60, up 180.62 points, or 2.11 percent, from the previous session. Yonhap
By Jun Ji-hye
KOSPI continued its upward trajectory Tuesday, following news of a ceasefire agreement between the United States and Iran, though the pace of gains slowed compared with the previous session.
The country’s benchmark index opened at 8,696.55, up 150.57 points, or 1.76 percent, extending its winning streak to a fourth consecutive session. The rally, however, lost momentum as trading progressed, with the index briefly falling to 8,540.41 around 10 a.m. It later rebounded to close at 8,726.60, up 180.62 points, or 2.11 percent.
The gains were notably more modest than Monday’s 5.20 percent surge.
Overnight on Wall Street, all three major indexes ended higher as investor sentiment improved after Washington and Tehran agreed to formally sign a peace accord in Geneva on Friday. The Dow Jones Industrial Average climbed 0.92 percent to a record close. The S&P 500 added 1.65 percent, while the tech-heavy Nasdaq Composite jumped 3.07 percent.
Oil prices also fell sharply as geopolitical tensions eased. Brent crude and U.S. West Texas Intermediate futures declined 4.9 percent and 4.8 percent, respectively, settling in the low $80-per-barrel range. The prices marked their lowest levels since March 10, shortly after the Iran conflict began.
Despite the improved risk appetite, investors remained cautious ahead of a series of central bank policy meetings scheduled for later this week.
“Some investors locked in profits as markets grew wary over the future pace of monetary tightening amid expectations that the Bank of Japan (BOJ) could raise its key interest rate from 0.75 percent to 1.00 percent,” said Kang Jin-hyuk, an analyst at Shinhan Securities.
Later in the day, the BOJ raised its benchmark short-term interest rate by 0.25 percentage points to 1 percent from 0.75 percent following its two-day policy meeting.
According to Kyodo News, seven of the central bank’s eight policy board members voted in favor of the rate hike, while one supported keeping rates unchanged. The latest increase pushed Japan’s benchmark interest rate to its highest level since September 1995, marking a 31-year high.
The secondary Kosdaq market, meanwhile, also opened higher at 1,039.00, up 4.97 points, or 0.48 percent. However, the junior bourse later fluctuated between gains and losses before ending the session at 1,018.68, down 15.35 points, or 1.48 percent.
In Seoul’s foreign exchange market, the Korean won weakened against the U.S. dollar, opening at 1,513.6 won per dollar, down 2.5 won from the previous session. The currency later recovered some ground to close the onshore session at 1,511.6 won, down 0.5 won from the previous close.