Ceasefire Hopes Fade: Stock Market Plunges and Exchange Rate Soars

Asset Markets Weaken as Hopes for Early End to U.S.-Iran Conflict Fade
Semiconductor Stocks Plunge on Concerns Over New Google Technology

On the 27th, with the KOSPI dropping more than 3% and starting below the 5,300 mark, the KOSPI and the won-dollar exchange rate are displayed on the status board in the dealing room of Hana Bank in Jung-gu, Seoul. Yonhap News

Expectations for a ceasefire between the United States and Iran have weakened, leading to a sharp decline in the South Korean stock market and a rise in the won-dollar exchange rate. Concerns have also emerged that Google's newly announced technology could reduce demand for memory semiconductors in the artificial intelligence (AI) industry, resulting in steep declines for semiconductor stocks such as Samsung Electronics and SK hynix.

On March 27, the KOSPI opened at 5,300.61, down 2.93% from the previous trading day, and extended its losses, trading at 5,225.78 as of 9:52 a.m., a 4.30% drop. At the same time, the KOSDAQ was trading at 1,103.92, down 2.88%. The won-dollar exchange rate opened at 1,508.6 won, up 1.6 won from the previous session, and climbed further to the 1,511 won level.

The financial market is being negatively affected by growing predictions that the war between the United States, Israel, and Iran will not end easily. Overnight on the New York Stock Exchange, the Dow Jones Index fell 1.01% from the previous session, and the Nasdaq Composite Index dropped 2.38%. The Nasdaq closed 11% below its previous all-time high, prompting assessments that it has entered a technical correction phase. Semiconductor stocks experienced significant declines, with Nvidia down 4.15%, SanDisk down 11.02%, Micron down 6.98%, and AMD down 7.46%.

In South Korea, semiconductor stocks such as Samsung Electronics and SK hynix are leading the market decline. As of 9:53 a.m., Samsung Electronics was trading at 172,400 won, down 4.28% from the previous session. SK hynix recorded 882,000 won, down 5.47%. Other major semiconductor stocks, including SK Square (down 5.02%), Samsung Electro-Mechanics (down 8.10%), and Hanmi Semiconductor (down 7.55%), also saw across-the-board declines.

Amid ongoing uncertainty related to the Iran war, Google's announcement of the TurboQuant algorithm—which is expected to reduce the memory demand for operating AI models by up to six times—appears to have negatively impacted investor sentiment in semiconductor companies. Han Ji-Young, a researcher at Kiwoom Securities, analyzed, "This is merely the publication of an algorithm in an academic paper, and actual commercialization will take time. Given that the fatigue from the memory price surge rally at the beginning of the year has not fully dissipated, it seems to have served as a justification for further profit-taking."

U.S. President Donald Trump announced on social media overnight that "at the request of the Iranian government, the suspension of power plant destruction will be extended for ten days until April 6." President Trump's statement extended the attack suspension, previously set for five days, by another ten days, just one day before the initial deadline expired. As skepticism over a negotiated end to the conflict grew, international oil prices surged. Brent crude futures closed at $108.01 per barrel, up 5.8% from the previous session, while West Texas Intermediate (WTI) closed at $94.48 per barrel, up 4.2%.

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