U.S. President Donald Trump announced that a peace agreement with Iran is nearing completion, leading to a significant surge in the New York stock market. With U.S. semiconductor stocks performing well and international oil prices declining, the South Korean market is expected to start strong, aiming to reclaim the 8000-point level for KOSPI.
On June 11, the Dow Jones Industrial Average closed up 929.97 points (1.86%) at 50,848.75. The S&P 500 rose 127.31 points (1.75%) to finish at 7,394.30, while the tech-heavy Nasdaq Composite gained 640.16 points (2.54%) to close at 25,809.66.
Market attention is focused on the situation in the Middle East. During a White House briefing, Trump stated, "We have reached an agreement that Iran will not possess nuclear weapons," adding that the documents are nearly finalized and will be signed soon. Earlier, he had canceled planned airstrikes on Iran via his social media, emphasizing progress in peace negotiations.
As hopes for an end to the conflict spread, international oil prices plummeted. Brent crude for August delivery fell 2.92% to $90.38 per barrel, while West Texas Intermediate (WTI) for July delivery dropped 2.58% to $87.71 per barrel. Brent crude is at its lowest since April, and WTI is at its lowest since late May.
Semiconductor stocks led the market rally, with Intel surging 9.27% and Micron rising 11.66%. Nvidia also gained 2.22%. The Philadelphia Semiconductor Index soared 7.91%, marking its largest single-day increase in a year.
Concerns about inflation eased somewhat. The U.S. Producer Price Index (PPI) for May rose 6.5% year-over-year, slightly above market expectations, but investors appeared more focused on the reduced risks in the Middle East.
The South Korean market is also expected to open strong. On the previous day, KOSPI had dropped below 7400 during trading but managed to close up 33.13 points (0.43%) at 7,763.95, thanks to bargain hunting by individual investors. KOSDAQ surged 4.76% to close at 996.93, nearing the 1000-point mark.
As of 8:49 a.m. on June 12, pre-market trading on NXT showed Samsung Electronics up 9.03% and SK Hynix up 9.23%. Other stocks like SK Square (8.88%), Samsung Electro-Mechanics (7.53%), Hyundai Motor (6.20%), and Samsung Life Insurance (7.12%) also showed strong gains.
Analysts believe that the progress in U.S.-Iran peace negotiations, easing inflation concerns, and the strength of semiconductor stocks will positively impact the South Korean market.
Han Ji-young, a researcher at Kiwoom Securities, stated, "The signing of the memorandum of understanding (MOU) between the U.S. and Iran is imminent, and the U.S. May inflation data is alleviating market anxiety. With the strength of U.S. semiconductor stocks and the rise in KOSPI 200 futures, the domestic market is expected to start strong and attempt to break through the 8000-point level amid sector rotation."
However, the upcoming Federal Open Market Committee (FOMC) meeting and uncertainties regarding central bank tightening are seen as potential variables. The market has noted that semiconductor, IT hardware, and inbound consumer-related sectors have shown relative resilience during recent adjustments.
One analyst remarked, "Even in a period of increased volatility, holding leading stocks like semiconductors remains a valid strategy," while also advising attention to sectors like securities, banking, machinery, and shipbuilding, which have high earnings visibility but have been relatively overlooked.
* This article has been translated by AI.
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