South Korea's stock market soared in early trading on Thursday after the United States and Iran effectively agreed to a two-week ceasefire. SK hynix (000660.KS), the bellwether semiconductor stock, breached the 1 million won mark during the session, and the surge triggered a program trading sidecar.
The Korea Composite Stock Price Index (KOSPI) opened at 5,804.70, up 309.92 points (5.64%) from the previous session, according to the Korea Exchange (KRX). The KOSDAQ index also jumped 47.84 points (4.61%) to open at 1,084.57.
Top stocks by market capitalization rallied across the board. As of 9:02 a.m., Samsung Electronics (005930.KS) climbed more than 7%, while SK hynix surged over 9% to break through the 1 million won level. Hyundai Motor (005380.KS) and Kia (000270.KS) each gained around 5%, and Samsung Biologics (207940.KS) and LG Energy Solution (373220.KS) also posted strong gains.
The sharp rally triggered a buy-side sidecar. The Korea Exchange announced that it activated a temporary suspension of program buy orders (sidecar) on the main bourse at 9:06:02 a.m. At the time of activation, the KOSPI 200 futures index stood at 875.45, up 51.35 points (6.23%) from the previous session.
A KOSPI sidecar is activated when the KOSPI 200 futures price rises 5% or more from the benchmark and sustains that level for one minute. The measure halts program buy orders for five minutes.
Easing Middle East risk expectations drove the market surge. U.S. President Donald Trump said the U.S. would halt attacks for two weeks on the condition that Iran agrees to open the Strait of Hormuz, effectively formalizing ceasefire expectations.
"With a full-fledged earnings season now under way following Samsung Electronics' earnings surprise, corporate profit momentum will steer market direction more than war-related variables," said Han Ji-young, a researcher at Kiwoom Securities (039490.KS). "There is a possibility that upward revisions to earnings consensus will continue, led by the semiconductor sector."