Kospi surges past 8,500 on US-Iran ceasefire hopes, eyes 9,000 mark

The Kospi surged more than 5 percent Monday to close above 8,500, propelled by news that the United States and Iran had reached a ceasefire agreement.

Foreign investors led the advance with net purchases exceeding 1 trillion won, while semiconductor stocks including Samsung Electronics and SK Hynix posted strong gains. The index soared from the opening bell, triggering a buy-side sidecar for the second consecutive session, and market attention is now turning to whether the Kospi can break through the 9,000 level.

The Kospi closed at 8,545.98, up 422.36 points, or 5.20 percent, from the previous session, according to Korea Exchange. The index opened 4.95 percent higher at 8,526.12 and at one point climbed as high as 8,603.48, a gain of 5.91 percent.

The index's sharp early advance triggered a buy-side sidecar — a temporary suspension of program buy orders — just six minutes after the opening bell. The mechanism activates when KOSPI 200 futures prices rise 5 percent or more above the reference price and hold that level for one minute, halting program buy orders for five minutes.

The trigger marked the second consecutive trading session with a buy-side sidecar, following Friday. The sidecar has now been activated 26 times on the main bourse this year, matching the total recorded during the 2008 financial crisis. Including circuit breaker activations, market interventions in response to extreme volatility have reached 29 this year.

Foreign investors drove Monday's gains. After snapping a 24-session net selling streak on Friday, foreign investors posted net purchases of 1.0119 trillion won — their second straight session of net buying. Institutional investors also net bought 539.2 billion won. Retail investors moved in the opposite direction, net selling for a second consecutive day and offloading 1.4882 trillion won in Monday's session alone.

Analysts said investor sentiment revived on reports that the United States and Iran had agreed to sign a ceasefire memorandum of understanding on June 19 local time, with provisions including the reopening of the Strait of Hormuz.

Samsung Electronics and SK Hynix both surged on the news, closing up 4.50 percent at 337,000 won and up 6.42 percent at 2,288,000 won, respectively. Samsung Electronics' market cap reached 1,970.2 trillion won, putting the company on the verge of reclaiming the 2,000 trillion won mark.

All 10 of the top market-cap stocks closed higher. Airline stocks — including Jeju Air, Asiana Airlines and Korean Air — also posted strong gains as oil prices fell.

Shares of Hyundai Pharm and TS Trillion hit the daily upper limit after reports that the government plans to extend national health insurance coverage to hair-loss treatment for young people.

The Kosdaq opened up 19.14 points, or 1.86 percent, at 1,048.19 but pared gains to close at 1,034.03, up 4.98 points, or 0.48 percent. On the Kosdaq, foreign investors were the sole net sellers, offloading 806.4 billion won, while retail and institutional investors net bought 616.4 billion won and 216.4 billion won, respectively.

The won edged lower against the dollar, supported by the ceasefire news and foreign net buying. The weekly closing rate in the Seoul foreign exchange market stood at 1,511.1 won per dollar as of 3:30 p.m., down 8.7 won from the previous session. That was the lowest weekly closing level since June 1, when the rate stood at 1,504.3 won.