On the 15th, the domestic stock market closed higher on news that the United States and Iran will sign a memorandum of understanding (MOU) to end the war. As risk appetite recovered, foreigners turned net buyers for a second straight trading day.
The KOSPI index closed at 8,545.98, up 422.36 points, or 5.20%, from the previous trading day. With a large inflow of funds into the main board, a "buy sidecar" was triggered, temporarily suspending buy orders in program trading for the first five minutes of the session. After that, the KOSPI index extended gains in the 8,500–8,600 range.
This was the 26th sidecar triggered on the main board this year. That matches the number for all of 2008 during the global financial crisis. It shows how volatile the market has been this year.
On the main board, foreigners lifted the index as they were net buyers for a second consecutive trading day. Foreign investors were net buyers of about 1 trillion won. Institutions also posted net purchases of 520 billion won. Specifically, financial investment, largely exchange-traded fund (ETF) money, had a 800 billion won buy imbalance, and pension funds were net buyers of 25 billion won. Individuals alone were net sellers of 1.5 trillion won.
Overnight, news broke that the United States and Iran agreed to sign an MOU to end the war. It comes 106 days after the war broke out. The United States and Iran plan to sign the MOU on the 19th. U.S. President Donald Trump signaled that the Strait of Hormuz will open after the MOU is signed.
International oil prices plunged on news of the Strait of Hormuz reopening. Brent crude for August delivery and West Texas Intermediate (WTI) for July fell 4% to trade around $83 and $81, respectively.
U.S. Government Bonds yields also fell slightly. The 10-year U.S. Treasury yield fell 1 percentage point to 4.43% per year, and the 30-year U.S. Treasury yield dropped 0.68 percentage point to 4.93%, where they are trading. Still, with the June Federal Open Market Committee (FOMC) rate decision ahead, uncertainty remains.
Lee Kyung-min, a researcher at Daishin Securities, said, "A cease-fire deal between the United States and Iran has been reached, but the June FOMC is pending," adding, "If the market can digest only this week's June FOMC results, the market's uptrend is expected to resume as it enters the full-fledged second-quarter earnings season and tracks profit forecasts."
Semiconductor stocks surged. Samsung Electronics and SK hynix jumped 4% and 6%, respectively, closing at "330,000 Electronics" and "2,280,000 Nix." Samsung Electro-Mechanics and LG Innotek soared 16% at the close. Power names such as LS Electric, Hyosung Heavy Industries, and HD Hyundai Electric were also strong.
The KOSDAQ index underperformed relatively. The index closed up 0.48% around 1,034. Individuals and institutions were net buyers of 600 billion won and 200 billion won, respectively, but foreigners were net sellers of 800 billion won. Secondary battery names such as EcoPro BM and EcoPro were strong.