KOSPI tops 6,000 intraday on hopes for US-Iran deal despite Hormuz blockade

A screen at the dealing room of Hana Bank’s headquarters in Seoul shows the KOSPI and exchange rate, Tuesday, when the benchmark index briefly reclaimed the 6,000 level in intraday trading. Yonhap

KOSPI briefly reclaimed the 6,000 mark during intraday trading Tuesday, supported by renewed optimism that the United States and Iran could eventually reach a deal, even as Washington moved to block the Strait of Hormuz.

The Kosdaq and the Korean won also moved higher.

The benchmark index opened at 5,960.00, up 151.38 points, or 2.61 percent, from the previous session, and climbed to 6,000.18 at around 10:12 a.m. It later pared gains to close at 5,967.75, up 159.13 points, or 2.74 percent.

It marked the first time KOSPI had risen back above the 6,000 level during intraday trading since March 3, the first trading session following the outbreak of the U.S.-Iran conflict, when it touched an intraday high of 6,180.45. On that day, however, the index plunged 7.24 percent to finish at 5,791.91.

The KOSPI had set a record by breaking above the 6,200 level for the first time on Feb. 26, but has since experienced heightened volatility amid uncertainty surrounding the Middle East conflict. On a closing basis, it last ended above 6,000 on Feb. 27, at 6,244.13, just before the war began.

The secondary Kosdaq also opened higher at 1,120.00, up 1.89 percent from the previous session, and ended the day at 1,121.88, up 22.04 points, or 2 percent.

The Korean won, which had traded near the 1,490-won level against the U.S. dollar a day earlier, opened Tuesday at 1,478.8 won, up 10.5 won, and closed at 1,481.2 won, up 8.1 won.

Ceasefire talks between the United States and Iran, which lasted 21 hours over the weekend, ended without agreement due to differences over key issues, including the reopening of the Strait of Hormuz and Iran’s nuclear program.

In response, Washington began a maritime blockade against Iran at 10 a.m. Eastern time on Monday, focusing on the Strait of Hormuz, a critical chokepoint through which about 20 percent of global oil and gas shipments pass.

The breakdown in talks initially heightened market anxiety, but buying momentum picked up again as media reports suggested that the two sides were continuing behind-the-scenes contact.

International oil prices also moved higher. Brent crude for June delivery climbed $4.16, or 4.37 percent, to $99.36 per barrel on ICE Futures Europe.

West Texas Intermediate (WTI) crude for May delivery also rose $2.51, or 2.6 percent, to $99.08 per barrel on the New York Mercantile Exchange.