On the 14th, the KOSPI index opened sharply higher. As news spread that the United States and Iran, which are negotiating under a truce, are continuing backchannel communications, concerns about war eased significantly and preference for risk assets is growing.

On the day, the KOSPI index began trading at 5,960.00, up 151.38 points (2.61%) from the previous session. The early session is seeing a surge of more than 2% continue.

Although the first cease-fire talks between the United States and Iran fell through, analysis is gaining traction that the two countries are putting considerable effort into negotiations and it will not lead to an escalation. U.S. President Donald Trump told U.S. media that "Iran desperately wants an agreement," and U.S. outlets reported that the two countries are continuing to seek a deal through backchannel contacts.

The KOSPI index and other figures appear on the electronic board in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul, on the morning of the 14th./Courtesy of News1

Also, on the 12th (local time), the United States said 34 ships transited the Strait of Hormuz, the most to pass through the strait since the outbreak of war.

As this news spread, preference for risk assets increased in global financial markets. U.S. stocks rose across the board, and Korea's market is also surging on the day. The won-dollar exchange rate opened around 1,478 won, more than 10 won lower than the previous session.

In the early session on the Korea Exchange, foreigners are net sellers, but the size is not large. Rather, among institutions, financial investment firms, where exchange-traded fund (ETF) trading is tallied, show a selling advantage of about 300 billion won. Individuals are net buying close to 300 billion won. National pension funds are also net buyers.

Samsung Electronics, SK hynix and Hyundai Motor, among the top stocks by market capitalization, are rising sharply, while IT, heavy industry, financials and telecommunications are strong. LS Electric, which released that it won a large-scale power infrastructure project in North America, is surging.

The KOSDAQ index also started higher and is showing gains of around 2%. With individual net buying continuing, the KOSDAQ index is moving near 1,120 points in the early session.

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