[Good Morning Stock Market] "US-Iran Conflict Eases, Delayed 'January Effect' Expected to Appear"

[Asia Economy Reporter Eunmo Koo] Tensions between the United States and Iran have eased, and although somewhat delayed, an analysis suggests that the 'January effect' will appear. The January effect is expected to continue mainly in the IT sector, which aligns with government policies.

◆Ye-eun Kim, Researcher at IBK Investment & Securities=Geopolitical risks originating from the Middle East due to military clashes between the US and Iran acted as a factor of volatility in the stock market at the beginning of the year. Although the risks have not been completely resolved, the possibility of escalation seems low as the conflict has subsided. Therefore, despite being somewhat late, it is judged that the January effect will manifest.

While the conflict between the US and Iran has not been fully resolved, it has subsided beneath the surface, so the stock market is expected to respond positively and rise again, with the IT sector, which aligns with government policies, continuing to play a central role.

Even when external risks expanded and investor sentiment wavered after the start of the year, foreign investors continued net buying, with IT at the core. This warmth is expected to spread from large-cap stocks to small and mid-cap stocks, positively influencing the stock market.

As external risks ease, risk asset preference continues, and the IT sector, which led the index rise, is expected to maintain its upward trend. Expectations for the semiconductor industry, government policies on materials, parts, and equipment, and amendments to the Data 3 Act all support the validity of an IT sector overweight strategy.

This warmth spreading from large-cap to small and mid-cap stocks is expected to bring the January effect into full swing, and IT is projected to remain the leading sector until corporate earnings bottom out and begin to improve significantly.

◆Youngjin Ahn, Researcher at SK Securities=Overall, the macro environment is favorable. The signing of the US-China Phase One trade agreement is expected around the 15th of this month. The Iranian government officially apologized to Canada and Ukraine for the passenger plane shootdown, strengthening the position of negotiators over hardliners. Additionally, the US December employment data reaffirmed the reflation environment. A more favorable environment for risk assets is anticipated.

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