Korea Stocks Set to Open Lower After US-Iran Talks Collapse, Trump Orders Iran Sea Blockade

Trump Orders Immediate Maritime Blockade of Iran After Peace Talks Collapse

Oil Surges Again, Fueling Market Volatility

South Korean stocks are set to open lower on April 10 after a rebound driven by hopes for a Middle East ceasefire was undercut by news that the first round of US-Iran peace talks had collapsed. Volatility is also rising after President Donald Trump announced a maritime blockade of Iran, sending crude prices sharply higher again.

According to the Korea Exchange, the Kospi closed 1.40% higher at 5,858.87 on April 10. Foreign buying lifted the benchmark as expectations grew for US-Iran peace talks. Samsung Electronics rose 0.98% to 206,000 won, while SK Hynix gained 2.91% to 1,027,000 won. On the main board, foreigners were net buyers of 1.1021 trillion won. Institutions and retail investors were net sellers of 294.1 billion won and 1.228 trillion won, respectively.

US stocks ended mixed on April 10 as inflation concerns persisted after consumer price data was released ahead of US-Iran peace talks. The March consumer price index matched market expectations, but investors remained cautious that war-driven higher oil prices could keep price pressures elevated for some time.

The Labor Department said March CPI rose 3.3% from a year earlier and 0.9% from the previous month. Both readings matched economist estimates compiled by Dow Jones. Core CPI, which excludes volatile food and energy prices, rose 2.6% from a year earlier, below market expectations. US consumers' one-year inflation expectations for April climbed to 4.8%, up 1.0 percentage point from the previous month, marking the largest increase in a year.

The Dow Jones Industrial Average fell 269.23 points, or 0.56%, to 47,916.57 on April 10. The S&P 500 slipped 7.77 points, or 0.11%, to 6,816.89, while the Nasdaq Composite rose 80.48 points, or 0.35%, to 22,902.89. For the week, the S&P 500 gained about 3.6% and the Nasdaq advanced about 4.7%, their strongest weekly performances since November last year. The Dow rose 3.0%.

The Korean market is poised to open lower after US-Iran peace talks over the weekend ended without progress and the US military announced a full blockade of Iranian ports. After US Central Command's announcement, both major crude benchmarks climbed above $100 a barrel. May West Texas Intermediate futures jumped 8% from the previous session to $104.20 a barrel, while June Brent futures, the global benchmark, rose more than 7% to $101.86.

In a statement, US Central Command said it would block all maritime traffic entering and leaving Iranian ports starting at 10 a.m. Eastern time on April 13, or 11 p.m. in Korea. The measure would be strictly enforced at all Iranian ports and coastal areas in the Persian Gulf and Gulf of Oman, regardless of nationality. Trump had earlier ordered the blockade after peace talks with Iran in Pakistan broke down.

Seo Sang-young, a researcher at Mirae Asset Securities, said tensions around the Strait of Hormuz and the Red Sea could heighten global supply-chain risks and weigh on the world economy. Weaker corporate investment, softer consumption and concern over slower growth could in turn erode appetite for risk assets.

Bae Seong-su, Hankyung.com reporter baebae@hankyung.com