South Korea’s Kospi index surged to a fresh record high on Monday, driven by rising oil prices and escalating U.S.-Iran tensions. President Trump’s rejection of Iran’s peace proposal has raised concerns about a prolonged conflict. Oil prices climbed, with WTI futures reaching $99.09 and Brent crude futures hitting $104.71 per barrel.
Asian markets traded mixed, with Japan’s Nikkei down slightly while China’s CSI 300 rose. Concerns over the Middle East conflict continue to influence global energy costs and market sentiment.
Seoul, South Korea - The South Korean benchmark Kospi index reached an all-time high in early trading on Monday, mirroring a broader rise in Asia-Pacific markets. This surge was primarily fueled by escalating oil prices and heightened geopolitical risks stemming from the ongoing tensions between the United States and Iran.
The market sentiment, however, remains cautious as President Donald Trump definitively rejected Iran's latest proposal aimed at resolving the protracted Middle East conflict. This rejection has amplified concerns about a prolonged and potentially destabilizing regional war.
Earlier, Iran had presented a new peace proposal to U.S. negotiators. According to Iran's semi-official Tasnim news agency, the offer included a comprehensive ceasefire on all fronts and the lifting of sanctions against Tehran. However, President Trump expressed his strong disapproval via a Truth Social post, deeming the response "TOTALLY UNACCEPTABLE!"
Adding to the regional instability, Israeli Prime Minister Benjamin Netanyahu stated on Sunday that the conflict with Iran was far from over, underscoring the continued international focus on curbing Tehran's nuclear ambitions. These developments come as President Trump is slated to visit China later this week for crucial discussions with President Xi Jinping.
The conflict and the potential disruption of the vital Strait of Hormuz have already led to a significant spike in global energy costs, contributing to sharply higher gasoline prices in the United States.
In commodity markets, West Texas Intermediate (WTI) crude futures for June delivery saw a substantial increase of 3.67%, trading at $99.09 per barrel as of 2:50 a.m. ET. Similarly, Brent crude futures for July delivery climbed 3.42% to $104.71 per barrel.
The Kospi index closed the trading session with an impressive gain of 4.32%, settling at 7,822.24 after its record-breaking opening. In contrast, the smaller Kosdaq index remained largely unchanged, trading flat at 1,207.34. A notable performer was index heavyweight SK Hynix, which surged over 11%, mirroring the strong performance of U.S. chip-related equities from the previous Friday.
Elsewhere in Asia, Japan's Nikkei 225 experienced volatile trading, ultimately falling 0.47% to 62,417.88. The broader Topix, however, managed a slight gain of 0.3%, closing at 3,840.93. Investors reacted to news that Nintendo plans to increase prices for its Switch 2 console while anticipating a downturn in sales, leading to an over 8% drop in its shares.
Australia's S&P/ASX 200 declined by 0.49% to 8,701.80. Meanwhile, China's CSI 300 index advanced by 1.62%, and Hong Kong's Hang Seng index traded flat. Investors in China were also digesting inflation data, which showed higher-than-expected consumer and producer price increases in April, largely attributed to rising commodity costs linked to the Middle East tensions.
India's Nifty50 index saw a decline of 1.01%.
Looking ahead, futures tied to the Dow Jones Industrial Average showed a decrease of 143 points, or 0.3%, indicating a potentially mixed opening for U.S. markets. S&P 500 and Nasdaq 100 futures also experienced a 0.3% dip.
These pre-market movements follow a strong performance on Wall Street last week, where the S&P 500 and Nasdaq Composite both rallied significantly, marking their sixth consecutive week of gains – a rare achievement for both indices since 2024. The Dow Jones Industrial Average also posted its fifth winning week out of the last six.
