Seoul Stocks Rise Nearly 7% After U.S.-Iran Ceasefire Agreement and Strong Samsung Earnings

By Kang Yoon-seung, Yonhap News Agency


*This photo, taken Wednesday, shows the trading room of Hana Bank in central Seoul during a session in which the benchmark KOSPI index rose nearly 7 percent. Photo by Yonhap*

South Korean stocks rose nearly 7 percent on Wednesday following a U.S.-Iran agreement on a two-week ceasefire and the reopening of the Strait of Hormuz, which contributed to a decline in global crude oil prices. The Korean won strengthened against the U.S. dollar. Separately, Samsung Electronics reported preliminary first-quarter earnings, including operating profit of 57.2 trillion won, up 755 percent from a year earlier, and revenue of 133 trillion won, up 68.1 percent and the first quarterly figure to exceed 100 trillion won.

The benchmark Korea Composite Stock Price Index (KOSPI) gained 377.56 points, or 6.87 percent, closing at 5,872.34 and marking a fourth consecutive session of advances.

Trading volume reached 926 million shares valued at 35.6 trillion won ($24.1 billion), with 782 gainers compared to 106 losers. Foreign investors purchased a net 2.43 trillion won of shares, while individual investors sold a net 5.41 trillion won. Institutions bought a net 2.71 trillion won.

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Early in the session, shortly after the opening bell, the bourse operator activated a buy-side sidecar, temporarily halting program-driven buy orders in KOSPI futures.

U.S. President Donald Trump stated that the U.S. had received a 10-point proposal from Iran, describing it as "a workable basis on which to negotiate." Iran's foreign ministry issued a statement indicating that "safe passage" through the Strait of Hormuz would be "possible via coordination with Iran's Armed Forces and with due consideration of technical limitations."

Global crude oil prices fell following the announcement, with West Texas Intermediate dropping below $100 per barrel.

"South Korea has been facing an all-out fallout from geopolitical risks, including a rise in global crude prices, and the turnaround could be equally strong," said Lee Kyoung-min, a researcher at Daishin Securities.

Analysts noted potential lingering uncertainties. Seo Sang-young, an analyst at Mirae Asset Securities, said: "(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." Israel has backed the U.S.-Iran ceasefire regarding Iran while excluding Lebanon and Hezbollah from the agreement and continuing strikes in those areas.

Market heavyweight Samsung Electronics, which released its strong quarterly earnings, advanced 7.12 percent to 210,500 won. Chipmaker SK hynix rose 12.77 percent to 1,033,000 won.

Hyundai Motor, the top carmaker, increased 7.4 percent to 508,000 won, while Kia gained 5.57 percent to 159,200 won.

Construction firms rose amid speculation of reconstruction opportunities in Iran: Daewoo Engineering & Construction hit the daily limit of 29.97 percent to 22,500 won, and Hyundai Engineering & Construction climbed 21.04 percent to 188,700 won.

Oil refiners declined as crude prices fell: SK Innovation fell 1.15 percent to 120,400 won, and S-Oil dropped 2.35 percent to 112,100 won.

Defense stocks also fell, with Hanwha Aerospace down 3.45 percent to 1,484,000 won and Hyundai Rotem off 2.13 percent to 206,500 won.

The won traded at 1,470.6 per U.S. dollar as of 3:30 p.m., up 33.6 won from the prior session.

Bond prices rose, with yields falling. The three-year Treasury yield decreased 13.6 basis points to 3.315 percent, and the five-year government bond yield fell 14.7 basis points to 3.475 percent.

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