Seoul stocks surge as US, Iran agree to 2-week ceasefire

A stock ticker at Hana Bank headquarters in central Seoul shows the benchmark KOSPI closing at 5,872.34, up 6.87 percent, Wednesday. The Korean won closed at 1470.6 per dollar, pulling back from levels above the psychologically significant 1,500-per-dollar threshold. Yonhap

Seoul stocks surged Wednesday, with the benchmark KOSPI climbing firmly above the 5,800 level for the first time in three weeks, after U.S. President Donald Trump’s surprise announcement of a two-week ceasefire with Iran lifted global risk sentiment.

The Korean won also rebounded, pulling back from levels above the psychologically significant 1,500-per-dollar threshold.

The provisional truce came just 90 minutes before Trump’s self-imposed deadline, alongside threats to bomb Iran’s power plants and bridges. Brokered through last-minute diplomatic efforts led by Pakistan, the agreement includes the temporary reopening of the Strait of Hormuz, a critical shipping route that carries one-fifth of the world’s oil and gas.

The KOSPI opened sharply higher at 5,804.70, up 5.64 percent from the previous session, according to the Korea Exchange. The steep early gains triggered a buy-side sidecar for five minutes — a safeguard that temporarily halts program trading during unusually large market swings. The index extended its rally through the session to close at 5,872.34, up 6.87 percent.

Foreign and institutional investors were heavy buyers, purchasing a net 3.12 trillion won ($2.12 billion) and 4.09 trillion won, respectively. It marked the first time since Feb. 12 that foreign investors posted net purchases exceeding 2 trillion won, following weeks of outflows. Retail investors, by contrast, offloaded 7.41 trillion won.

A similar pattern played out on the tech-heavy Kosdaq, where the secondary bourse opened 4.61 percent higher at 1084.57 and closed at 1,089.85, up 5.12 percent.

Currency markets echoed the shift in sentiment. The Korean won gained strong ground against the dollar as easing geopolitical tensions revived risk appetite. In Seoul’s onshore foreign exchange market, the won closed at 1470.6 per dollar, down 33.6 won from the previous session, pulling back from levels above 1,500.

Heavyweight stocks rallied across the board, extending the broader market gains.

Shares of Samsung Electronics, which reported a record first-quarter operating profit of 57 trillion won a day earlier, jumped 7.12 percent to close at 210,500 won. SK hynix followed suit, climbing 12.77 percent to finish at 1,033,000 won.

Global oil prices, meanwhile, plunged more than 15 percent as the opening of the strait dampened supply concerns. Brent crude, the global benchmark, fell to $93 per barrel, while U.S. West Texas Intermediate crude settled at around $94.

Cho Yong-gu, an analyst at Shinyoung Securities, said the two-week ceasefire and the reopening of the Strait of Hormuz triggered a broad-based rally in Korean assets.

“The ceasefire and the resumption of traffic through the Strait of Hormuz drove a triple rally across the won, equities and bonds,” he said.