[Good Morning Market] Ceasefire Hopes Already Priced In, Limited Upside for Korean Stocks

Despite Negative Developments Such as U.S. and Iran's Ceasefire Violation Statements,
Ceasefire Optimism Prevails, Leading to a Higher Close

Korea Sees Rebound Led by Major Stocks

"Upside Remains Limited"

With the Middle East war entering a two-week ceasefire, the U.S. stock market soared, and the domestic stock market is also expected to show a stable trend.

On April 8 (local time), at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 47,909.92, up 1,325.46 points (2.85%) from the previous trading day. The S&P 500, focused on large-cap stocks, rose by 165.96 points (2.51%) to 6,782.81, while the tech-heavy NASDAQ Index closed at 22,635, up 617.15 points (2.8%).

The major U.S. stock indices surged across the board following reports that the United States and Iran had dramatically reached an agreement for a two-week ceasefire, the start of peace negotiations, and the reopening of the Strait of Hormuz. Even after intraday statements from Iran accusing Israel of violating the ceasefire following its attacks on Lebanon, concerns over energy inflation risks stemming from the Middle East, and minutes from the March Federal Open Market Committee (FOMC) meeting discussing possible rate hikes, optimism about the ceasefire prevailed and the market closed higher.

On the 6th, an employee is monitoring the stock market and exchange rates in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. On this day, the KOSPI opened at 5423.35, up 0.86% from the previous trading day. The won/dollar exchange rate rose by 5.1 won to 1510.3 won, and the KOSDAQ started the day at 1068.33, up 0.43%. April 6, 2026 Photo by Jo Yongjun

However, since this is not a complete end-of-war agreement, there is still caution that the conflict could reignite if negotiations break down in the future. For example, if Israel continues its attacks on Lebanon or Iran continues to accuse Israel of violating the ceasefire, there are indications that it will be difficult to expect significant progress at the first round of talks scheduled for the 11th.

The domestic stock market, which closed sharply higher the previous day, is expected to continue its rebound led by major stocks, amid perceptions that the risk from the war has peaked and in response to a surge in U.S. semiconductor stocks including the Philadelphia Semiconductor Index (up 6.3%).

However, as the market surged the previous day, the upside is expected to be limited. This is because optimism over the ceasefire agreement has already been priced in. Lee Sunghoon, a researcher at Kiwoom Securities, said, "Among major stock markets, Korea and Japan, which were expected to be most severely affected by the closure of the Strait of Hormuz, showed the largest gains," adding, "As the perception increases that the worst of the war-related risks has passed, and with the earnings season starting, market sensitivity to earnings will also increase going forward."

There are also forecasts that foreign investors will be net buyers. Since April, the intensity of net selling by foreigners has gradually decreased, and nearly 2 trillion won was bought on a net basis the previous day. Han Jiyoung, a researcher at Kiwoom Securities, explained, "The easing of war risks and the stabilization of the exchange rate, which had surged to the 1,500-won range, have created factors that encourage net buying by foreign investors."

This content was produced with the assistance of AI translation services.