Seoul: South Korean stocks experienced a significant decline, falling by more than 1.5 percent, breaking a four-day streak of gains. Investors were reacting to conflicting statements from Washington and Tehran regarding the terms of their recently agreed two-week ceasefire. The Korean won also weakened against the U.S. dollar.

According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) dropped 94.33 points, or 1.61 percent, closing at 5,778.01. The trading volume was substantial, with 1 billion shares exchanged worth 29.4 trillion won (approximately US$19.8 billion). The market saw more losers than gainers, with 509 stocks falling compared to 356 gaining.

Foreign investors offloaded a net 874 billion won, while individual investors purchased a net 298 billion won. Institutional investors bought a net 206 billion won. The United States and Iran announced a two-week ceasefire agreement on Tuesday, which included plans to reopen the critical Strait of Hormuz.

However, uncertainties lingered as the two nations disagreed on whether the ceasefire terms included halting Israel's offensive against Lebanon. Iran warned that it might withdraw from the agreement, including its pledge to keep the Strait of Hormuz open, if Israel's attacks on Lebanon continued, while the U.S. maintained that the issue was not part of the deal.

Analysts pointed out that these disagreements have kept investors wary as upcoming negotiations between the U.S. and Iran are scheduled for the weekend. "Amid such developments, concerns over a renewed shutdown of the Strait of Hormuz have emerged, driving global crude prices higher and keeping investors on alert," said Lee Kyoung-min, a researcher at Daishin Securities.

Kim Seok-hwan, an analyst at Mirae Asset Securities, added, "Although the U.S. and Iran agreed on a ceasefire, both sides still have terms they cannot accept." Tech stocks suffered as investors opted to cash in their recent gains, with Samsung Electronics dropping 3.09 percent to 204,000 won and SK hynix declining 3.39 percent to 998,000 won.

Defense company Hanwha Aerospace fell 2.22 percent to 1,451,000 won, and Hyundai Rotem decreased by 1.69 percent to 203,000 won. Conversely, oil refiners saw gains as global crude prices rebounded due to the geopolitical uncertainties. SK Innovation advanced 2.00 percent to 124,000 won, and S-Oil surged 6.69 percent to 119,600 won.

Mobile carriers also benefited, with SK Telecom rising 5.39 percent to 93,800 won and LG Uplus increasing by 0.37 percent to 16,190 won. The local currency stood at 1,482.5 won against the U.S. dollar by 3:30 p.m., marking an 11.9 won decrease from the previous session.

Bond prices, which move inversely to yields, ended lower. The yield on three-year Treasurys increased by 2.3 basis points to 3.338 percent, and the return on the benchmark five-year government bonds rose by 1.5 basis points to 3.49 percent.