Seoul: South Korean stocks spiked nearly 7 percent after the United States and Iran agreed on a two-week ceasefire and the reopening of the Strait of Hormuz, leading to a steep decline in global crude prices. The Korean won also sharply rose against the U.S. dollar.

According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) added 377.56 points, or 6.87 percent, to 5,872.34, extending its gains to a fourth straight session. Shortly after the opening bell, the bourse operator activated a buy-side sidecar, temporarily halting program-driven buy orders in KOSPI futures earlier in the session.

U.S. President Donald Trump announced that the U.S. has received a 10-point proposal from Iran, which he considers a "workable basis on which to negotiate." Iran's foreign ministry also released a statement noting "safe passage" through the crucial waterway will be "possible via coordination with Iran's Armed Forces and with due consideration of technical limitations."

Following the announcement, global crude prices, including West Texas Intermediate (WTI), fell below US$100 per barrel. "South Korea has been facing an all-out fallout from geopolitical risks, including a rise in global crude prices, and the turnaround could be equally strong," Lee Kyoung-min, a researcher at Daishin Securities, said.

Analysts, however, said uncertainties may linger as Israel remains silent on the issue. "(Israel) has not yet responded on whether it would stop attacks on Iran if the U.S. and Iran reach a ceasefire," Seo Sang-young, an analyst at Mirae Asset Securities, said. "This may lead to an escalation of tensions led by Israel."