KOSPI Rockets 5.8% as U.S.-Iran Two-Week Ceasefire Eases Oil Fears

Markets in Seoul opened with a sharp relief rally after reports that the United States and Iran agreed to a two-week halt in fighting that had roiled global energy markets.

The Korea Composite Stock Price Index jumped to 5,804.70 at the opening bell on Wednesday, more than 300 points above Tuesday’s close. By the close the benchmark was up 5.83% at 5,815.19 — one of the index’s biggest single-day gains in recent years — as traders reassessed the outlook for oil and global trade.

Brent crude futures fell roughly 16% in the immediate market reaction, sliding to about $93 a barrel, according to market data. The drop in oil prices relieved a major cost pressure on South Korea, a large importer of Middle Eastern crude, and eased worries about disruptions to shipping through the Strait of Hormuz.

The Korean won strengthened alongside equities: the dollar traded around 1,474.53 won on Wednesday, about 1.5% weaker than in the previous session, reflecting an unwinding of safe-haven demand and improved sentiment toward energy-importing economies.

The immediate catalyst was a social media post by U.S. President Donald Trump saying he would pause U.S. strikes on Iran for two weeks if key conditions were met. Trump said the pause would allow an agreement to be finalized and credited talks with Pakistan’s leaders for helping secure the understanding. Iran’s Supreme National Security Council issued a statement accepting a two-week ceasefire and agreeing to engage in talks in Islamabad, while cautioning that the pause did not amount to an end of the war.

That backdrop — weeks of fighting since late February and concerns that the Strait of Hormuz could be closed or restricted — had already priced considerable geopolitical risk into Korean assets. With the prospect of a temporary easing of hostilities, investors quickly re-rated assets that benefit from lower energy costs and steadier global trade, notably technology and other cyclical sectors.

Analysts said the size of the move reflected how much negative news had been priced in over recent weeks. Sector-level data from the Korea Exchange were not immediately available, but traders noted gains among companies with high fuel consumption or exposure to freight costs, while energy-linked names often lag in such a sell-off.

The rally in Seoul was mirrored across Asian and global markets, where equities climbed and energy-linked assets fell. Still, both Washington and Tehran framed the two-week window as a period to finalize terms rather than a permanent de-escalation, and Iran’s warning that the conflict is not over kept investors cautious.

Key details about implementation and monitoring of the ceasefire — including verification of shipping lanes, limits on military movements, and specific concessions to be negotiated in Islamabad — were not fully disclosed in initial statements. Those unanswered questions matter for markets: any resumption of attacks on energy infrastructure, shipping or regional allies could quickly push oil prices back up and reverse the relief rally.

For now, investors in Seoul are treating the ceasefire as a meaningful, if fragile, easing of one of the largest external shocks to the Korean economy this year. Whether Wednesday’s surge marks the start of a sustained re-rating or a brief reprieve will depend on progress in diplomacy and the day-to-day operation of the Strait of Hormuz as negotiators prepare for talks in Pakistan’s capital.