Technology firms powered Seoul’s Kospi index to another record high on Friday as oil prices extended losses as traffic began to resume in the Strait of Hormuz under the US-Iran deal.
The surge in South Korea led to gains in most Asian stock markets, which came as investors appeared to have passed up bets this week on a US Federal Reserve interest rate hike before the end of the year.
The gains also followed a strong lead on Wall Street, where the tech-heavy Nasdaq rose almost two percent thanks to heavyweights including Amazon, Alphabet and Nvidia.
Chip titans SK hynix and Samsung were once again the standout performers in Seoul, which jumped three percent on Friday and is up more than 100 percent this year as the AI boom continues apace.
Tokyo’s Nikkei 225, which has rallied alongside the Kospi this year, also rose on Friday along with Wellington and Manila. Sydney and Singapore posted declines in holiday-reduced trade.
Hong Kong, Shanghai and Taipei were closed.
Gains were also helped by the easing of hostilities between the United States and Iran after Presidents Donald Trump and Masoud Pezeshkian signed a memorandum of understanding.
That kicked off 60 days of talks on broader issues, including Iran’s nuclear program.
Iran’s Supreme Leader Ayatollah Mojtaba Khamenei said in a written statement Thursday that he had approved the deal despite having a “different point of view,” without elaborating.
US forces earlier on Thursday lifted their naval blockade of Iranian ports that had prevented ships from sailing to or from the Islamic Republic, the US military said, noting that US warships “will remain in the general area”.
Three Saudi oil tankers left the Gulf through the strait on Thursday, maritime trackers said.
However, observers have noted that while the waterway – through which one-fifth of crude flows – has reopened, it may take some time before supplies return to pre-war levels.
Stock markets have rallied this week and crude oil has fallen on the back of the deal that was announced last weekend.
“The repricing this week has been drastic and part of it was due to the resumption of Iranian oil almost immediately,” Tony Sycamore, a market analyst at IG, told Bloomberg Television.
“What comes next is the risk of execution. There are still many details to be discovered.”
And Forex.com’s Fawad Razaqzada said investors will now be able to turn their focus back to the company’s economic outlook and performance.
“What’s almost certain to happen now is that markets will become increasingly data-dependent. For now, stock bulls hold some sway,” he wrote in a commentary.
“However, with valuations still elevated and a lack of visible near-term catalysts, the prospect of profit-taking or a modest correction has become more plausible following the Fed’s tough pivot.”
In currency markets, the yen strengthened but remained above 161 to the dollar – and near its weakest level since 1986 – after this week’s jump on expectations of a Fed rate hike.
The yen’s gains were also helped by comments from Japanese Finance Minister Satsuki Katayama, who warned of “bold action against excessive speculative movements in the foreign exchange market.”
The government spent about 11.7 trillion yen ($72 billion) last month to prop up the currency by intervening in financial markets.
The currency was still in trouble despite the Bank of Japan’s decision to raise interest rates on Tuesday to the highest level since 1995.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: UP 0.4 percent to 71,314.67 (break)
Seoul – Kospi: UP 2.3 percent to 8,980.18
Hong Kong – Hang Seng Index: Closed for holidays
Shanghai – Composite: Closed for holidays
West Texas Intermediate: DOWN 0.6 percent to $76.14 a barrel
Brent North Sea crude: DOWN 0.3 percent to $79.62 a barrel
EUR/USD: DOWN at $1.1456 from $1.1460 on Thursday
Pound/dollar: DOWN at $1.3200 from $1.3206
Dollar/yen: DOWN at 161.20 yen from 161.32 yen
Euro/pound: DOWN to 86.76 pence from 86.78 pence
New York – Dow: UP 0.1 percent to 51,564.70 (close)
London – FTSE 100: DOWN 1.0 percent to 10,399.70 (close)
