Kospi opens sharply higher on possible Iran deal, triggers buy-side sidecar

Stocks opened sharply higher Thursday as investors pinned hopes of a possible end to the Iran war after U.S. President Donald Trump said the United States has reached a "great settlement," with the Korea Exchange (KRX) issuing a buy-side sidecar.

The Kospi opened up 499.9 points, or 6.44 percent, at 8,263.85.

Korea's benchmark bourse tracked overnight advances on Wall Street, where major stock indexes closed sharply higher.

Following a rise in the index, a buy-side sidecar was triggered by the KRX at 9:06 a.m.

A sidecar halts program trading for five minutes when certain market indexes fluctuate beyond a designated threshold. A buy-side curb is triggered when the Kospi 200 Futures index rises 5 percent or more for at least one minute. 

The futures index was trading at 1,332.00 at the time of activation, up 7.76 percent from the previous session's close. 

Shares have been rising on optimism about the end of the Iran War.

On Thursday, Trump said he canceled the scheduled strikes against Iran, claiming a "settlement" has been reached and a deal will be signed, possibly in Europe, as soon as this weekend.

Iran has not confirmed it.

U.S. producer inflation, meanwhile, posted the largest annual gain in some three years in May as the Middle East crisis boosted the cost of energy products, raising speculation that the U.S. Federal Reserve may quicken its monetary tightening to tame inflation.

BY LEE TAE-HEE, YONHAP [[email protected]]