Kospi Jumps 5.2% to Reclaim 8,500 as Foreigners Buy for Second Day

South Korea’s Kospi surged more than 5% on June 15 to reclaim the 8,500 level after investor sentiment improved on signs the 106-day conflict involving the US, Israel and Iran had effectively ended. Risk appetite strengthened as oil prices turned lower ahead of a normalization of traffic through the Strait of Hormuz, easing inflation concerns.

Foreign investors stopped a prolonged selling streak and bought stocks for a second straight session. Samsung Electronics Co. and SK Hynix Inc., the market’s two semiconductor heavyweights, also reclaimed the 340,000-won and 2.3 million-won levels in intraday trading.

The Kospi closed at 8,545.98, up 422.36 points, or 5.2%, from the previous session. After opening 4.95% higher, the benchmark rose nearly 6% at one point and briefly topped 8,600. At about 9:06 a.m., a buy-side sidecar was triggered for five minutes after Kospi 200 futures surged, temporarily halting program buy orders.

Strong buying by foreign and institutional investors drove the rally. In the main Kospi market, foreigners bought 1.5902 trillion won of shares and institutions purchased 910 billion won. Foreign investors snapped a 10-session selling streak and extended net buying that began on June 12 into a second trading day. They also bought a net 759.4 billion won of Kospi 200 futures. Retail investors were net sellers, unloading 2.4184 trillion won to lock in profits.

The gains reflected easing geopolitical risk in the Middle East. President Donald Trump said early on June 15 that talks to end the war with Iran had concluded, boosting demand for risk assets. International oil prices also cooled on news that the Strait of Hormuz would fully reopen. Brent crude futures for August delivery fell to $83 a barrel, while West Texas Intermediate futures dropped to around $81.

Lee Kyung-min, an analyst at Daishin Securities Co., said the end of the US-Iran war strengthened appetite for risk assets and lifted shares broadly across sectors.

All of the top 20 stocks by market value finished higher, including Samsung Electronics, up 4.5%, and SK Hynix, up 6.42%. Samsung Electro-Mechanics Co. rose 16.63%, Samsung C&T Corp. gained 14.58%, HD Hyundai Heavy Industries Co. climbed 9.85%, Samsung Life Insurance Co. advanced 9.73%, Doosan Enerbility Co. added 7.2%, Hyundai Motor Co. rose 6.59% and LG Energy Solution Ltd. gained 5.13%.

Airline shares also rallied on lower oil prices. Jeju Air Co. jumped 18.66%, Asiana Airlines Inc. climbed 13.86%, Trinity Aviation rose 13.31%, Korean Air Lines Co. gained 12.78% and Jin Air Co. advanced 12.52%.

The Kosdaq closed at 1,034.03, up 4.98 points, or 0.48%, from the previous session. After opening 1.86% higher, the index extended gains to as much as 2.46% during the session before surrendering most of the advance as money rotated into large-cap Kospi names.

In the Kosdaq market, retail and institutional investors bought 865 billion won and 215.1 billion won of shares, respectively, while foreigners sold 1.037 trillion won. Among major Kosdaq stocks, HPSP rose 16.78%, EcoPro BM Inc. gained 9.71%, EcoPro Co. advanced 7.17%, Rainbow Robotics rose 5.77%, Alteogen Inc. added 3.56% and Kolon TissueGene Inc. climbed 2.14%. EO Technics Co. fell 13.24%, Leeno Industrial Inc. dropped 7.37% and Wonik IPS Co. lost 4.8%.

The won also strengthened sharply against the dollar after news of the US-Iran agreement to end the war. In Seoul trading, the won closed the daytime session at 1,511.1 per dollar, up 8.7 won from the previous session.

Ko Jung-sam, Hankyung.com reporter skyhigh1024@hankyung.com