South Korean stocks soared nearly 3 percent and the won strengthened sharply on April 3 amid reports of Iran drafting a protocol with Oman to monitor Strait of Hormuz traffic, fueling hopes of easing oil supply disruptions from the ongoing Middle East conflict. The KOSPI index climbed 2.74 percent to 5,377.30, while the won rose to 1,505.2 per U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) soared 143.25 points, or 2.74 percent, to 5,377.30 on April 3, rebounding from prior losses, according to Yonhap News Agency. Trading volume was 1.12 billion shares worth 22.13 trillion won ($14.69 billion), with gainers outnumbering losers 664 to 224. Foreign investors net bought 814.57 billion won and institutions 716.93 billion won, while individuals sold a net 2.09 trillion won.
The rally followed Iran's Deputy Foreign Minister Kazem Gharibabadi's comments that Tehran is drafting a protocol with Oman to monitor maritime traffic through the Strait of Hormuz, which has been effectively shut since the Middle East war erupted in late February, driving up global oil prices. "Iran has said the measure is intended to ensure safety and improve services, suggesting that the blockade of the waterway may be easing," said Seo Sang-young, a researcher at Mirae Asset Securities. U.S. President Donald Trump warned of an "extremely hard" attack on Iran within two to three weeks, including threats to "bring them back to the Stone Age," and had previously set an April 6 deadline for reopening the strait.
Top shares ended mostly higher. Samsung Electronics surged 4.37 percent to 186,200 won and SK hynix soared 5.54 percent to 876,000 won. Shipbuilders rallied, with HD Hyundai Heavy spiking 9.23 percent to 479,000 won and Hanwha Ocean up 7.29 percent to 128,000 won. LG Energy Solution fell 1.48 percent to 398,500 won.
The won traded at 1,505.2 against the dollar at 3:30 p.m., up 14.5 won. Bond yields declined, with the three-year Treasury falling 2.9 basis points to 3.448 percent and the five-year note down 5.7 basis points to 3.622 percent.
Finance Minister Koo Yun-cheol stated that the government has implemented measures to stabilize the foreign exchange market, expecting improved supply-demand conditions. He highlighted close monitoring of volatility due to the Middle East war and the launch of the reshoring investment account (RIA), offering tax deductions for shifting funds to domestic equities.
