News of a one-month U.S.-Iran ceasefire…will the KOSPI regain strength? [Today’s market preview]

With reports emerging that the United States and Iran will declare a one-month ceasefire, South Korea’s stock market is expected to extend gains on the 25th. U.S. equity index futures are climbing across the board, while international crude prices are plunging.

The local market closed higher the previous day, driven by spreading optimism over an early end to the war with Iran. According to the Korea Exchange, the KOSPI ended at 5,553.92, up 148.17 points (2.74%) from the prior session, reclaiming the 5,500 level. Retail and institutional investors were net buyers of KRW 723.0 billion and KRW 967.0 billion, respectively, in the main board market, lifting the index. Foreigners, meanwhile, were net sellers of KRW 1.9860 trillion—marking a fourth straight session of net selling.

Korea’s two chip heavyweights—Samsung Electronics (1.83%) and SK hynix (5.68%)—both finished higher. Other top market-cap names such as Hyundai Motor (1.44%), LG Energy Solution (10.25%) and SK Square (6.82%) also rose. Doosan Enerbility (-0.60%) and Kia (-2.35%) fell.

The KOSDAQ also ended higher, closing at 1,121.44, up 24.55 points (2.24%) from the previous session. Foreigners and institutions posted net buying of KRW 167.0 billion and KRW 22.0 billion, respectively, while retail investors were net sellers of KRW 159.0 billion. Samchundang Pharm, the No. 1 stock by market cap on the KOSDAQ, climbed as high as KRW 1.025 million intraday to join the ranks of so-called “imperial stocks,” but later slipped 0.53% to finish at KRW 936,000.

With optimism and pessimism over the Middle East situation pulling in opposite directions, Wall Street closed lower overnight. The Dow Jones Industrial Average fell 84.41 points (0.18%) to 46,124.06. The S&P 500 dropped 24.63 points (0.37%) to 6,556.37, and the Nasdaq Composite declined 184.87 points (0.84%) to end at 21,761.89.

However, after the close, an Israeli media outlet reported a one-month U.S.-Iran ceasefire, and The New York Times (NYT) also reported that “the U.S. sent Iran a peace plan to end the war,” prompting futures markets to turn higher. As of 6 p.m. local time, Dow futures were up 0.66%, S&P 500 futures 0.70%, and Nasdaq futures 0.98%. West Texas Intermediate (WTI) crude futures on the New York Mercantile Exchange also tumbled in the 4% range.

Han Ji-young, a researcher at Kiwoom Securities, said, “Downside pressure on oil prices due to one-month ceasefire talks between the U.S. and Iran, and the KOSPI 200 night futures rising around 1.2% are upside factors, suggesting the local market is likely to move higher today as well.” He added, “As seen yesterday when the KOSPI opened with a surge in the 4% range before turning lower intraday, there is a tactical standoff among market participants over the near-term direction of stock prices,” and noted, “Technically, it’s a zone where directional bets are unclear, but fundamentally, we judge that the medium-term outlook for gains remains intact.”

Reporter Yang Ji-yoon yang@hankyung.com