South Korean stocks reached a new record high, extending April’s strong rally, as investors monitored geopolitical tensions and a U.S. plan to reopen the Strait of Hormuz. “Project Freedom,” announced by Donald Trump, aims to free stranded civilian ships in the waterway, leading to an immediate dip in global oil prices while other Asian and U.S. markets showed mixed reactions.
South Korean equities soared to unprecedented levels on Monday, extending a remarkable performance from April that saw the market achieve its strongest monthly gains. This rally unfolded amidst investors carefully assessing escalating tensions between Iran and the United States, particularly concerning a new U.S. initiative to secure shipping routes in the crucial Strait of Hormuz.
In a significant development, former U.S. President Donald Trump announced on Truth Social Sunday his administration's intention to launch "Project Freedom." This operation aims to liberate civilian vessels that have been stranded in the Strait of Hormuz since the onset of the Iran war, allowing them to resume their normal commercial activities freely.
The U.S. Central Command elaborated on the scope of "Project Freedom," confirming that it is scheduled to commence on Monday, Middle East time. The initiative will receive substantial military backing, including guided-missile destroyers, over 100 land and sea-based aircraft, advanced multi-domain unmanned platforms, and a contingent of 15,000 service members. The primary objective is to ensure non-affiliated ships can safely navigate the contested waterway.
Following Trump's announcement, global oil prices experienced a dip. West Texas Intermediate (WTI) futures for July delivery declined by 0.26% to $101.68 per barrel by 10:08 p.m. ET. Similarly, the international benchmark Brent crude futures saw a decrease of 0.13%, trading at $108.03 per barrel.
Beyond South Korea's robust performance, other Asia-Pacific markets presented a mixed picture. The Kospi index in South Korea surged impressively by 3.89%, while Hong Kong's Hang Seng index also posted solid gains of 1.8%. Conversely, Australia's S&P/ASX 200 recorded a slight dip of 0.28%. Markets in both Japan and China remained closed for public holidays, contributing to varied regional activity.
Meanwhile, U.S. stock futures showed minimal movement on Sunday night, trading near the flatline. S&P 500 futures edged up 0.1%, and Nasdaq 100 futures also gained 0.1%. Futures linked to the Dow Jones Industrial Average added 100 points, marking a 0.2% increase. This followed a strong Friday session where both the S&P 500 and Nasdaq Composite reached new all-time intraday and closing highs, rising 0.29% and 0.89% respectively. The Dow, however, diverged from this trend, closing down 152.87 points, or 0.31%.
