Asia
South Korean Stocks Hit New High Above 8,000 on Hopes of US-Iran Deal
South Korean stocks closed at a new high, above the 8,000-point level on Tuesday, as investors hoped for a U.S.-Iran agreement to reopen the Strait of Hormuz.The Korea Composite Stock Price Index or Kospi jumped by 199.8 points, or 2.6%, to end at 8,047.51. The Kosdaq also increased by 11.39 points, or 1%, to close at 1,172.52.Brent crude rose 2% to $98.26 a barrel on Tuesday after the U.S. carried out military operations in southern Iran and mixed signals from U.S. President Donald Trump on Washington-Tehran negotiations kept traders on edge, while U.S. WTI crude futures were down 5.1% at $91.73 per barrel.Despite the ongoing ceasefire and negotiations to permanently end the war, the U.S. targeted and attacked Iranian missile launch sites and boats around the Strait of Hormuz in what its military called "self-defense strikes."The strikes took place after Iranian foreign ministry spokesman Esmail Baqai said that although talks progressed with the U.S., a deal to end the conflict "is not imminent".In economic news, South Korea's central bank is expected to hold the base rate steady at 2.50% at its rate-setting meeting on May 28, 30 out of the 32 economists projected in a poll by Reuters.In addition, most of the economists expect one or more rate hikes by the end of this year as the U.S.-Iran war is projected to add inflationary pressures, Reuters said.The rate hike expectations come after inflation surpassed the central bank's 2% target, with April inflation hitting its highest level in nearly two years as the ongoing war in the Middle East and the blockade of the Strait of Hormuz kept oil prices above $100 a barrel for almost three months.The Bank of Korea is also expected to raise this year's growth forecast from 2% on Thursday, making the case strong for further rate hikes ahead.In corporate news, Sunic System (KOSDAQ:171090) secured a large-area deposition equipment contract for organic light-emitting diode deposition equipment from LG Display (KRX:034220), according to a filing with the Korea Exchange on Tuesday.The contract, the value of which was undisclosed, is valid till May 21, 2027.Shares of the electrical components manufacturer rose more than 1% at market close, while those of LG Display rose over 3%.
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