[Good Morning Stock Market] "US-Iran Military Tension Eases, Attempting to Regain 2200 Level"

[Asia Economy Reporter Eunmo Koo] Although volatility may increase at any time due to the conflict between the United States and Iran, military tensions have eased, leading to an analysis that the domestic stock market will attempt to reclaim the 2200-point level. The scheduled signing of the Phase 1 trade agreement between the U.S. and China next week, which is easing concerns over the U.S.-China trade conflict, is also viewed positively.

◆Daehun Han, SK Securities Researcher=Since the beginning of the year, the domestic stock market has been experiencing a volatile trend. Except for the 3rd, fluctuations of around 1% have been repeated. Geopolitical risks expanded due to the U.S. attack on Iran’s second-in-command Soleimani and concerns over Iran’s retaliation, which increased uncertainty and dampened investor sentiment and caution. Fortunately, U.S. President Donald Trump stepped in to calm the situation, leading to a rebound in stock prices. He alleviated fears by stating that there would be no further attacks assuming Iran takes no military action. However, the issues between the U.S. and Iran remain potential risks that could flare up at any time.

Although the deterioration of relations between the U.S. and Iran will be prolonged due to the imposition of economic sanctions, military tensions have fortunately eased. While there is a burden that volatility could increase at any time, the market is expected to attempt to reclaim the 2200-point level again as the worst-case scenario has been avoided. Moreover, the U.S. and China are scheduled to sign the Phase 1 trade agreement on the 15th. To this end, Chinese Vice Premier Liu He will lead a delegation to visit the U.S. from the 13th to the 15th. The Chinese government has also officially announced the signing of the Phase 1 agreement. With the second round of trade negotiations also anticipated, concerns over the trade conflict are expected to gradually ease.

The Taiwanese presidential election is scheduled for the 11th. Due to the impact of the Hong Kong protests, the incumbent President Tsai Ing-wen is highly likely to be re-elected. Given her strong pro-independence stance, the One Country, Two Systems policy may be shaken. On the other hand, Korea-China relations have become more amicable. This is also why semiconductor stocks, which were at a relative disadvantage compared to Taiwan, have rebounded. Since the Iran situation is expected to be prolonged, volatility could increase at any time depending on developments. However, caution over the U.S.-China trade dispute has lessened, and the surrounding environment for the semiconductor sector is favorable, so the stock price decline due to the Iran situation should be seen as a buying opportunity.

◆Yonggu Kim, Hana Financial Investment Researcher=Next week, the domestic stock market is expected to show a neutral price trend testing the downside support of the KOSPI 60-month moving average line (around the 2150-point level on the converted index), which is the long-term central trend line of the market. The Middle East geopolitical risk stemming from the U.S.-Iran military clash has severely impacted the busy domestic and international financial markets. The Middle East tensions triggered by Iran stimulated the release of program arbitrage selling, including foreign futures and financial investment spot sales, which had been heavily inflowing in the fourth quarter of last year, causing the market to fluctuate wildly. However, the fact that the positive outlook on the global semiconductor industry recovery was further strengthened through Samsung Electronics’ preliminary earnings announcement in the fourth quarter and the dual love calls from foreign and institutional investors was a faint positive factor confirmed amid the sluggish market conditions.

The focus of domestic and international stock markets next week is also expected to remain on the variable of Iran’s geopolitical risk. The fact that President Trump’s side stated they do not want additional military force despite immediate economic sanctions against Iran and are considering pursuing a new nuclear agreement is a clear positive factor supporting the possibility of early resolution. On the other hand, unlike the 2015 nuclear negotiations, the current international environment lacks a suitable mediator to calm the agitated camps, and the ongoing Middle East geopolitical tensions have historically favored the U.S. presidential election path. Additionally, the possibility of further provocations by pro-Iranian Shiite armed groups active in Syria, Lebanon, Yemen, and the Gaza Strip, requests for dispatching troops to protect navigation in the Strait of Hormuz from major U.S. allies, and potential additional Iranian retaliation limit the possibility of a short-term resolution. These remain negative factors. This is why there is weight given to the possibility of a seesaw game structure oscillating between optimism and pessimism.

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