Tensions in the Middle East persisted as the United States and Iran, holding their first negotiations since the cease-fire, confirmed differences, but Korea's stock market showed relatively strong performance. Although it fell on news that the talks failed, the decline was not steep and the KOSPI defended 5,800 points. The KOSDAQ turned higher intraday.
On the 13th, the KOSPI ended at 5,808.62, down 50.25 points (0.86%) from the previous session. The KOSPI opened at 5,737.28, down 121.59 points (2.08%), but trimmed losses during the session and managed to hold the 5,800 level.
The KOSDAQ finished at 1,099.84, up 0.57% (6.21 points) from the previous session. The KOSDAQ opened at 1,076.85, down 16.78 points (1.53%), but turned higher during the morning session.
The market swung on the day due to the collapse of U.S.-Iran negotiations and the re-blockade of the Strait of Hormuz. The first end-of-war talks between the United States and Iran held over the weekend ultimately broke down. The two sides held talks for 21 hours from the 11th to the 12th but reportedly failed to narrow differences over banning Iran's possession of nuclear weapons.
U.S. Vice President JD Vance said Iran did not show a willingness to abandon nuclear weapons, while the Iranian side said the deal fell through as they differed on two to three key issues.
Then U.S. President Donald Trump said after the talks collapsed, "The U.S. Navy will immediately begin blockade measures on all vessels entering or leaving the Strait of Hormuz."
The U.S. military is set to begin blockade measures on all maritime traffic entering and exiting Iranian ports starting at 11 p.m. Korea time on the day. However, the Iranian side had said, "It was realistically difficult to expect to reach an agreement in a single meeting."
Lee Kyung-min, a researcher at Daishin Securities, said, "President Trump's remark about blockading the Strait of Hormuz stoked the market's biggest worries of a re-blockade of the strait and higher oil prices, and risk appetite retreated as a result."
Indeed, as a re-blockade of the Strait of Hormuz loomed, international oil prices surged. On the day, West Texas Intermediate (WTI) futures jumped 9.04% from the previous session to as high as $105.29 per barrel.
Despite concerns over a re-blockade of the Strait of Hormuz, individual buying continued in the stock market. Individual funds flowed into both the Korea Exchange main board and the KOSDAQ. On the main board, individuals were net buyers of 750 billion won. In contrast, foreigners and institutions were net sellers of 459.9 billion won and 702.3 billion won, respectively.
On the KOSDAQ, individuals bought a net 264 billion won, while foreigners and institutions sold a net 154.8 billion won and 93.2 billion won, respectively.
Kang Jin-hyeok, a researcher at Shinhan Investment & Securities, said, "Despite the U.S. remark about a re-blockade of the Strait of Hormuz, individual funds flowed in on expectations that the negotiation phase would continue."
Although the talks collapsed and investor sentiment weakened, some sectors gained. Among large-cap stocks on the main board, which mostly declined, SK hynix, which is expected to report earnings soon, closed up 1% on the day. SK Square also rose 2.11%.
Defense stocks also gained as the talks fell apart. Hanwha Aerospace and LIG Nex1 also ended higher. LS Electric, which resumed trading for the first time after a stock split, rose 13.71% at the close. Sectors such as optical communications, which still carry strong expectations for artificial intelligence (AI) beneficiaries, and consumer stocks also finished higher.