Kospi set to open higher as US-Iran ceasefire deal reached, '9,000' milestone in sight

By Jung Yoon-hee, The Herald Business

The Kospi, which had swung sharply in both directions for some time, is expected to open higher Monday after the United States and Iran reached a ceasefire agreement, raising hopes the benchmark index could push past the 9,000 mark.

On the previous trading session Friday, the Kospi surged 4.63 percent to close at 8,123.62, reclaiming the 8,000 level on optimism over a potential end to the Iran conflict. The rally was sharp enough to trigger a buy-side sidecar — a temporary suspension of program buy orders — early in the session on the main bourse.

Foreign investors were a key driver, posting net purchases of 2.2044 trillion won (about $1.45 billion) and returning as net buyers in the Kospi market for the first time in 25 trading sessions. Their buying was concentrated in semiconductor stocks, lifting Samsung Electronics by 7.86 percent and SK Hynix by 2.33 percent.

On Wall Street last Friday, all three major indexes rose after reports emerged that a US-Iran ceasefire agreement was imminent.

The Dow Jones Industrial Average gained 0.70 percent, while the S&P 500 and the Nasdaq Composite rose 0.50 percent and 0.31 percent, respectively. Buying accelerated on reports that Washington and Tehran were close to a preliminary deal centered on reopening the Strait of Hormuz to toll-free passage.

International oil prices tumbled as geopolitical tensions eased. West Texas Intermediate crude for July delivery settled at $84.88 a barrel, down 3.23 percent from the previous session — its lowest level since April 17.

SpaceX, Elon Musk's aerospace company, surged on its first day of trading, closing at $161.11, up 19.34 percent from its IPO price.

Among technology stocks, Nvidia rose 0.16 percent, AMD gained 4.73 percent and Intel climbed 6.51 percent, pushing the Philadelphia Semiconductor Index up 1.52 percent.

South Korean stocks are also expected to open higher Monday after news broke that the US and Iran had finalized a ceasefire deal.

After Wall Street closed, Donald Trump announced via Truth Social in the early hours Monday Korean Standard Time that a ceasefire agreement with Iran had been reached. "The deal with the Islamic Republic of Iran is now finalized," Trump said. "I fully approve the toll-free opening of the Strait of Hormuz."

The agreement in effect ends the Iran war — which began Feb. 28 with a joint US-Israeli military strike on Iran — after 106 days of fighting.

A stabilizing won-dollar exchange rate could also encourage further foreign buying. The dollar-won rate closed at 1,518.30 won in early-morning trading Saturday, down 10.60 won from the previous Seoul foreign exchange market close.

However, some analysts have raised the possibility that capital outflows tied to the SpaceX listing could continue to weigh on markets.

"SpaceX, which listed last Friday, instantly broke into the top six US-listed companies by market capitalization," said Jung Yoon-hee, a researcher at Kiwoom Securities. "Buying interest in SpaceX could persist this week, potentially drawing capital away from space-related stocks in the same theme as well as domestic and overseas IT shares — including semiconductors and AI."