Kospi Jumps 6.87% to 5,872 on US-Iran Ceasefire Agreement

Buy sidecars triggered on both the Kospi and Kosdaq

Won-dollar rate tumbles by more than 30 won

South Korea’s two main stock markets surged on Aug. 8 after the U.S. and Iran effectively reached a two-week ceasefire agreement.

The Kospi closed at 5,872.34, up 377.56 points, or 6.87%, from the previous session. A buy sidecar was triggered on the benchmark market after Kospi 200 futures jumped more than 6% early in the session. It was the seventh buy sidecar this year.

A Kospi sidecar is triggered when Kospi 200 futures rise at least 5% from the reference price and hold that gain for one minute. It suspends program buy orders for five minutes.

The rally was driven by what investors viewed as an effective agreement between the U.S. and Iran on a two-week ceasefire and the reopening of the Strait of Hormuz.

About an hour before his negotiating deadline expired, President Donald Trump wrote on Truth Social that the U.S. would halt bombing and attacks on Iran for two weeks, provided Tehran agreed to the full, immediate and safe reopening of the Strait of Hormuz. He said the decision followed talks with Pakistani Prime Minister Shehbaz Sharif and Field Marshal Asim Munir.

Trump described it as a mutual ceasefire applying to both sides.

He also wrote that the U.S. had already met and exceeded all of its military objectives and was very close to a final agreement for long-term peace with Iran, and more broadly in the Middle East.

Trump said he had received a 10-point proposal from Iran and saw it as a practical basis for negotiations. Most of the previous points of contention had already been resolved, he wrote, and the two-week pause would be used to finalize a deal.

Iran’s Supreme National Security Council said in a statement that the U.S. had accepted all 10 points in Tehran’s ceasefire proposal.

On the Kospi, foreign and institutional investors were net buyers of 3.1227 trillion won and 4.0901 trillion won, respectively. Retail investors were net sellers of 7.4131 trillion won.

Most of the Kospi’s largest companies advanced. Samsung Electronics rose 7.12% to 210,500 won and SK Hynix jumped 12.77% to 1,033,000 won. Samsung Electronics preferred shares, Hyundai Motor, SK Square, Doosan Enerbility, Kia and KB Financial Group also climbed between 5% and 15%. LG Energy Solution and Hanwha Aerospace closed lower.

Energy shares such as Korea Petroleum Industrial, Daesung Energy and SK Gas fell on the ceasefire news. In contrast, reconstruction-related stocks including Daewoo E&C, GS E&C, DL E&C, Hyundai E&C and Jeonjin Construction Robot surged.

A buy sidecar was also triggered on the Kosdaq. The index closed at 1,089.85, up 53.12 points, or 5.12%. In the Kosdaq market, foreign and institutional investors were net buyers of 264.6 billion won and 417.8 billion won, while retail investors were net sellers of 643.2 billion won.

Samchundang Pharm, which had fallen to the daily limit in after-hours trading the previous day, dropped more than 5% again.

The won-dollar exchange rate also fell sharply on the U.S.-Iran ceasefire agreement. In Seoul trading, the won closed the daytime session at 1,470.6 per dollar, down 33.6 won from the previous session.

Noh Jung-dong, Hankyung.com reporter dong2@hankyung.com