South Korea's benchmark Korea Composite Stock Price Index (KOSPI) surged 606.46 points, or 7.81 percent, to 8,370.41 as of 11:20 am local time on Friday, 12 June, as remarks by US President Donald Trump signalling an imminent end to the Iran war ignited a broad-based rally. Institutional and foreign investors piled into blue-chip technology stocks, keeping the index comfortably above the 8,000-point threshold after a sharply higher open.

Trump's Iran Deal Remarks Spark the Rally

On Thursday (US time), President Trump declared that Washington had reached 'a great settlement' on the conflict with Iran, adding that a formal agreement could be signed 'as early as this weekend'. Iran, however, had yet to confirm any such deal as of the time of reporting. Trump elaborated: 'We have a signing soon and the documents are in pretty final shape. So, we'll see. Very good ... should be done pretty quickly.'

The president also said the Strait of Hormuz — virtually shut by the conflict — would 'officially open as soon as we sign, which could be soon, very soon, maybe over the weekend in Europe.' Crucially, Trump identified the 'most important paragraph' of the prospective document as the clause stipulating that 'Iran will, in no way, shape or form, have a nuclear weapon or purchase a nuclear weapon.'

Tech and Auto Giants Lead the Charge

Chip heavyweight Samsung Electronics climbed 11.37 percent, the standout gainer of the session, while memory rival SK Hynix added 8 percent. Automaker Hyundai Motor advanced 5.53 percent, consumer electronics maker LG Electronics rose 6.19 percent, and financial conglomerate KB Financial jumped 8.05 percent. The gains broadly tracked overnight advances on Wall Street, where Trump's comments had already lifted US indices.

Bank of Korea Holds a Hawkish Line

Against the market euphoria, the Bank of Korea signalled a different priority. Governor Shin Hyun-song, in a message marking the central bank's 76th anniversary, said the bank should 'raise interest rates without delay' — reaffirming a hawkish stance even as geopolitical risks appeared to ease. The juxtaposition of a rate-tightening signal alongside a geopolitics-driven equity surge underscores the complex macro backdrop facing South Korean policymakers.

Why the Strait of Hormuz Matters for South Korea

South Korea imports the vast majority of its crude oil through the Strait of Hormuz, making any disruption to the waterway a direct threat to its energy security and export competitiveness. The conflict had all but closed the strait, pushing up global oil prices and disrupting shipments of oil, fertiliser, and other commodities. A verified ceasefire and reopening of the strait would meaningfully reduce input-cost pressures for South Korea's energy-intensive manufacturing sector.

What to Watch Next

Markets will be closely monitoring whether Iran officially confirms the reported settlement and whether a signing ceremony materialises over the coming weekend. Any breakdown in talks — or silence from Tehran — could quickly unwind Friday's gains. Analysts will also watch how the Korean won, quoted at 1,519.9 won per US dollar (up 9 won from the previous session), responds to confirmation or denial of the deal.