JAKARTA - South Korea's stock market jumped sharply and the won strengthened on Monday morning after the United States and Iran were said to have reached a peace deal. The news of the reopening of the Strait of Hormuz also eased oil price pressure and lifted market sentiment.
As reported by Yonhap quoted Monday, June 15, the Korea Composite Stock Price Index or KOSPI benchmark index rose 407.79 points or 5.02 percent to 8,531.41 at 09.15 Seoul time. The sharp rise made the Seoul exchange operator implement a buy-side sidecar, which is a temporary suspension of the program for five minutes to dampen the market's too rapid surge.
The strengthening also occurred in the money market. The South Korean won opened at 1,511.4 won per US dollar, strengthening 8.4 won from the previous close. The currency had touched 1,504 won per US dollar, the strongest intraday level since June 1.
At 09.48, the won was trading at 1,506.8 per dollar, strengthening 7.9 won from the previous session.
The market rise came after US President Donald Trump announced via social media that Washington and Tehran had reached an agreement. The news raised hopes that the war in the Middle East would soon end and the Strait of Hormuz would reopen.
The Strait of Hormuz is important because it is the main route for the world's energy shipments. When this line is disrupted, oil prices usually go up. After the news of the deal emerged, Brent prices fell 3.37 percent to 87.3 US dollars per barrel, far from around 100 US dollars at the beginning of May.
In the same report, Yonhap said almost all stock sectors in Seoul strengthened. Samsung Electronics rose 4.96 percent, while SK hynix strengthened 6.65 percent.
Hyundai Motor rose 6.75 percent. HD Hyundai Heavy Industries jumped 9.54 percent. Hanwha Aerospace strengthened slightly 0.74 percent.
Although the market responded positively, details of the deal are not yet fully available. The signing is said to be carried out on Friday in Switzerland. Israel's attitude is still unclear.
The won's strengthening also came after South Korean Deputy Finance Minister Moon Ji-sung met with US officials last week to discuss the latest conditions in the foreign exchange market.
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