"We agree to suspend bombing and attacks on Iran for two weeks, on the condition that Iran agrees to a complete, immediate, and safe opening of the Strait of Hormuz." "This will be a bilateral ceasefire."

U.S. President Donald Trump made this announcement on his social network, Truth Social, on the 7th (local time).

U.S. President Donald Trump is speaking about the U.S.-Iran war at the White House in Washington D.C. on the 6th. Photo by AFP

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Indeed, after U.S. President Donald Trump expressed his intention to agree to a two-week ceasefire in the Middle East war, the KOSPI 200 futures index surged, triggering a buy-side circuit breaker in the Korea Exchange on the 8th, with Samsung Electronics and SK Hynix both showing strong performances. As of 9:10 a.m. on the 8th, Samsung Electronics was trading at 209,750 won, up 6.74% (13,250 won) from the previous trading day, while SK Hynix was trading at 1 million won, up 9.17% (84,000 won) from the previous day.

On the 8th, when news broke that the United States and Iran had agreed to a two-week ceasefire, the KOSPI index started the session with a surge of more than 6% immediately after the market opened. Various indices are displayed on the status board in the dealing room of Hana Bank in Jung-gu, Seoul. Photo by Dongjoo Yoon

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According to the financial investment industry on the 8th, the Korean stock market is expected to rise if the risks from the Middle East are alleviated. Analysts first point out that the KOSPI's valuation has reached an extremely undervalued range, leaving room for an upward move.

Currently, the KOSPI's 12-month forward price-to-earnings ratio (PER) has fallen to 7.75 times. This is interpreted to mean that, as in previous similar cases, a rebound could be imminent. When the KOSPI's 12-month forward PER falls below 8 times, it is considered an extremely undervalued phase (deep value), and if risk concerns dissipate, a reversal to an upward trend may follow.

Lee Kyungmin, a researcher at Daishin Securities, explained, "In the past, during periods of heightened economic and earnings uncertainty—such as the COVID-19 pandemic, when the figure was 7.52 times, and during the 2018 U.S.-China trade war, semiconductor downturn, and rise in bond yields, when it was 7.62 times—each time, the market saw a trend reversal from those lows, and when economic shocks remained merely a concern, a V-shaped rebound unfolded. Therefore, if geopolitical risks are eased or resolved this time as well, a strong upward reversal is expected."

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The return of foreign investors, who had previously been selling Korean stocks to avoid risk, may also underlie the market rebound. Since the outbreak of the war, the net selling by foreigners has exceeded 35 trillion won over one month.

Kim Junyoung, a researcher at iM Securities, said, "After the war, the Korean stock market fell 13.9%, marking the largest drop except for Indonesia, which had its own specific issues. However, given the steep decline, a rapid rebound is also likely. The net selling by foreigners was the result of concerns about foreign exchange losses and the geopolitical premium acting together, and if the war ends, both of these factors will ease simultaneously," he added.

In particular, the semiconductor sector is expected to lead the upward trend in stock prices. Despite the war, semiconductors posted robust export performance. Last month, semiconductor exports reached 32.8 billion dollars, surpassing 30 billion dollars for the first time in history. This means semiconductors accounted for 38% of Korea's total exports.

Samsung Electronics recorded its highest-ever performance in the first quarter of this year, with sales of 133 trillion KRW and an operating profit of 57.2 trillion KRW, marking a 755% increase compared to the same period last year. Following the record-breaking sales of 93 trillion KRW and operating profit of 20 trillion KRW in the fourth quarter of last year, this surprise performance continues the streak of record-breaking results for two consecutive quarters. Photo by Yonhap News Agency, showing Samsung Electronics headquarters in Seocho-gu, Seoul, on the 7th.

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The day before, Samsung Electronics' preliminary first-quarter results were announced, far exceeding market expectations and boosting optimism for the entire sector. Samsung Electronics reported consolidated sales of 133 trillion won in the first quarter of this year, marking an all-time high. Operating profit for the first quarter was provisionally tallied at 57.2 trillion won, up 755% from the same period last year.

With memory prices on an upward trend, the growth momentum of semiconductor companies is expected to be maintained even after the second quarter. Kim Dongwon, head of research at KB Securities, said, "Despite the significant price increases in the first quarter, major clients are prioritizing stable memory supply over prices, and the strength of orders is showing a marked increase compared to the first quarter. Furthermore, AI data center clients are accelerating the competition to secure supply by proposing binding contract terms such as large upfront payments and penalty clauses to ensure mid-to-long-term supply stability," he explained.

In addition, the energy sector has been highlighted as a common area to watch. Kim Sungkeun, a researcher at Mirae Asset Securities, stated, "While uncertainties related to Iran persist, it is important to increase interest in renewable energy and key materials from the perspective of strengthening national security. U.S. energy could also become an alternative as demand shifts from Middle Eastern energy sources."

Last week, the best-performing exchange-traded funds (ETFs) were also energy-related. As of the 6th, PLUS Solar & ESS topped the weekly returns with 14.52%. KODEX Renewable Energy Active (10.07%) ranked second, and HANARO Fn Eco-Friendly Energy (9.03%) placed fourth, showing that energy-related ETFs dominated the top spots.

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Semiconductors are also expected to be a leading ETF theme after the end of the war. Nam Yongsoo, head of ETF management at Korea Investment Management, suggested, "Although price volatility has increased recently due to the war, from a fundamental perspective, global big tech companies' data center investment plans remain unchanged. Therefore, a strategy of investing in ETFs that cover overall global semiconductor demand remains worthwhile."

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He added that a strategy of splitting purchases of gold-related ETFs for risk hedging and diversification purposes remains valid. Nam further commented, "From a mid-to-long-term perspective, central banks' gold purchases, expanding fiscal deficits, demand for diversification of dollar assets, and the ongoing nature of geopolitical risks remain key factors supporting gold's investment value."

Since there is still the possibility of stock price declines due to lingering uncertainties, another recommendation was to start systematic investment now. A strategy of buying covered call ETFs that pay monthly dividends was suggested. Covered call ETFs have limited upside in a rising market but pay higher distributions than other types by adding premiums from selling call options. Kang Songcheol, a researcher at Eugene Investment & Securities, said, "There remains the possibility of further declines in stock prices due to continued war and surging oil prices, as well as the possibility of a rebound if tensions ease. With the high price burden having eased since last month’s declines, now is a good time to begin systematic investing," he said.