KOSPI Posts Limited Rebound Amid Uncertainty
On April 10, South Korea's benchmark stock indices, the KOSPI and KOSDAQ, exhibited high volatility as expectations of peace talks between the U.S. and Iran clashed with ongoing instability in the Middle East. The market saw a limited rebound within a specific price range, capturing investors' attention.
Overnight, U.S. markets rallied on messages of seeking a peaceful resolution between the U.S. and Iran, alongside President Donald Trump's comment that an "agreement is within sight." The Dow Jones Industrial Average closed up 0.58% at 48,185.80, while the S&P 500 and Nasdaq Composite indices gained 0.62% and 0.83%, respectively, marking their second consecutive day of gains. However, crude oil prices climbed again due to Iran's announcement restricting vessel passage through the Strait of Hormuz, with WTI May futures rising 3% to $97.87 and Brent crude June futures hovering in the $95 range. Uncertainty stemming from the Middle East persisted.
South Korea's domestic stock market experienced a correction on April 9. The KOSPI index closed down 1.61% at 5778.01, and the KOSDAQ index fell 1.27% to 1076.00. Foreign investors, who had led a sharp rise the previous day, significantly impacted the indices by selling a net 1.2894 trillion won worth of KOSPI stocks. The high exchange rate also weighed on the domestic market. On April 9, the dollar/won exchange rate closed at 1482.5 won, up 11.9 won from the previous trading day, according to the Seoul foreign exchange market. Commercial banks anticipate a short-term trading range between 1470-1480 won, with a possibility of re-entering the 1500 won level in the medium to long term.
Analysis by NewsPim's AI tools, integrating these global and domestic conditions, indicates that the KOSPI is likely to fluctuate around the 5800 mark and the KOSDAQ around the 1080 level, showing a pattern of limited rebounds. Positive factors such as the strength of New York markets and the sustained rally in AI and big tech stocks initially led to a slight gap-up opening, particularly for IT, internet, and semiconductor sectors, though intraday volatility could increase. Signals suggest that increased investment in AI, cloud, and servers by global companies is translating into improved earnings. Consequently, demand for bargain hunting emerged consistently for stocks related to AI infrastructure, data centers, and cloud services, including Samsung Electronics and SK Hynix, in the domestic market. The uptrend of major overseas tech stocks such as Meta Platforms, Marvell Technology, and Amazon supported this trend.
Prolonged blockade of the Strait of Hormuz and the attack on some facilities have heightened supply uncertainty. As a result, oil refining, gas, and trading companies are expected to benefit in terms of inventory and margins. Conversely, the airline, travel, and transportation sectors may face slowed momentum or profit-taking due to rising oil prices.
Despite expectations of a ceasefire and peace negotiations, the de facto blockade of the Strait of Hormuz and geopolitical risks have not been fully resolved. Defense, nuclear power, and LNG carrier sectors could see medium to long-term benefits, whether from a prolonged conflict or increased investment in energy security post-peace agreement. Therefore, despite short-term volatility, an increase in positions during pullbacks is being considered.