KOSPI Pares Gains After Surging Over 2% Intraday; Hormuz Standoff Pushes Oil Prices Higher
Taylor Wilson
South Korea's KOSPI jumped over 2% intraday Monday before paring to roughly 0.75%, driven by SK Hynix's ₩54 trillion expansion plan; a Strait of Hormuz negotiation deadlock pushed Brent past $84, with both threads set to define the week's market direction.
SK Hynix is spending ₩54 trillion on expansion — what's the bet?
SK Hynix announced a roughly ₩54 trillion capex plan: ₩35.2 trillion for the Yongin "Y2" fab, ₩19.1 trillion for the Cheongju "M17" fab.
This means → SK Hynix is betting that AI-era memory demand will keep scaling, locking in capacity across two sites at once.
The news lifted SK Hynix 1.5% and Samsung Electronics roughly 2.3%, making the chip sector KOSPI's main driver on the day.
Asia-Pacific markets rallied together — what signal were they following?
KOSPI briefly topped 2% before paring to about 0.75%. South Korea's KOSDAQ triggered the SIDECAR mechanism — a circuit breaker that pauses program-driven buying during sharp index moves.
Japan's Nikkei 225 gained roughly 2% in the morning session; the TOPIX rose 0.8%, led by semiconductor names Advantest and Tokyo Electron.
In plain terms = the region was following Friday's Wall Street rally: a softer-than-expected U.S. July payrolls report was read as "economy cooling → Fed more likely to cut," sending the S&P 500 to a record high.
Hormuz talks broke down — why does oil keep climbing?
Brent crude rose over 1% Monday to $84.16/bbl; WTI gained roughly 0.84% to $78.64/bbl. Brent had already rallied more than 5% over the prior three sessions.
Iran-Oman weekend talks failed to produce an agreement on reopening the Strait of Hormuz. Iran's foreign minister Araghchi stated explicitly: "There are no negotiations between Iran and the U.S. at present"; all exchanges go through intermediaries.
Iran's top security official Zolghadr said the strait will stay closed until Washington meets six conditions, including ending hostilities against Iran and its allies and paying compensation. This means → no near-term reopening is in sight, and supply-risk premiums stay priced in.
Beyond Hormuz — what other risks are stacking up?
Washington insists any reopening must guarantee unrestricted freedom of navigation, with no Iranian approval, tolling, or oversight conditions — a wide gap between the two sides.
Citi noted that Yemen's Houthi forces continue to attack Saudi-linked vessels near the Red Sea and Bab el-Mandeb Strait, keeping shipping risks elevated well beyond Hormuz.
Westpac wrote: "Six months into the Iran conflict, uncertainty remains high. The Strait of Hormuz is effectively still closed, and Houthi involvement further disrupts Red Sea alternative shipping lanes."
Why has Trump suddenly gone "low-key"?
According to CCTV News, Trump said he is handling the Iran situation "quietly" and that the U.S. can wait for Tehran to soften under economic pressure rather than escalate militarily.
AMP economist My Bui wrote in a client note that with Trump's approval rating at a new low, investors should not be overly bearish — "markets remain in a normal state, supported by solid fundamentals, strong economic growth, and productivity gains."
In plain terms = Trump is dialling back the rhetoric partly because his domestic approval is sliding and partly because the market reads a softer tone as "lower odds of a military clash," keeping risk appetite intact for now.
What should investors watch this week?
Bloomberg strategist Mark Cranfield noted that while oil rallied, traders doubt it can last — net-long oil positions rebounded only modestly in July and have been trimmed across crude contracts.
Elsewhere: the 10-year U.S. Treasury yield rose 1 bp to 4.66%, the 2-year climbed 2 bp to 4.21%; gold fell roughly 0.5% to near $4,320/oz after surging over 7% the prior week.
This reflects a market waiting for one key data point: U.S. July CPI, due this week, will test whether the "slowing jobs + mild inflation + Fed on hold" narrative can hold together.
Content is for reference only, not financial advice.