[Good Morning Market] Uncertainty Over Middle East War and New Highs: Impact on Korean Stocks

U.S. Markets Close Slightly Lower

Korean Market Shows Sector Rotation

Amid Short-Term Fatigue After Breakout to New Highs

The U.S. stock market fell slightly due to news that Iran would not participate in the second round of negotiations. As for the Korean stock market, it is expected that a sector rotation market will emerge due to short-term fatigue following the previous day's breakout to a new high.

On the 21st, as the KOSPI index surpassed the 6350 mark intraday, reaching a new high, the current status of the domestic stock market was displayed on the electronic board in the dealing room of Hana Bank's headquarters in Jung-gu, Seoul. 2026.4.21 Photo by Kang Jinhyung

On April 21 (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 49,149.38, down 293.18 points (0.59%) from the previous session. The S&P 500 index fell 45.13 points (0.63%) to 7,064.01, and the tech-heavy Nasdaq Composite Index ended at 24,259.96, down 144.43 points (0.59%).

Risk appetite was dampened amid concerns over the expiration of the ceasefire deadline during the session, as Iran refused to participate in negotiations and fears grew over the possible resumption of U.S. military operations. However, after the market closed, U.S. President Donald Trump announced via social media that while the blockade of the Strait of Hormuz would remain in place, the ceasefire would be extended until negotiations are concluded. Iran has stated that it will not recognize this extension, but after 7 a.m. the U.S. futures market rebounded and international oil prices (WTI) remained in the $90 range ($90.36).

For the Korean stock market, the impact is expected to come more from the previous day's record high rather than the effects of the war. Ji Young Han, a researcher at Kiwoom Securities, said, "Due to short-term fatigue following the KOSPI's breakout to a new high, we expect the market to show sector rotation as it absorbs temporary profit-taking."

Earnings announcements for the first quarter of this year, which will be released during the week, are expected to have a significant impact on the Korean stock market going forward. Han explained, "The KOSPI's monthly gain for April ranked second highest since records began, and while this surge was mainly driven by stronger earnings momentum, it also suggests that expectations for first-quarter earnings may have temporarily risen." Han added, "For core sectors such as semiconductors and defense, the key issue is not the first-quarter results themselves, but whether earnings momentum can further strengthen from the second quarter onward." He advised investors to maintain an overweight position in leading stocks, noting that the full-year earnings consensus (average of securities firms' forecasts) for these stocks is being revised upward beyond the second quarter.

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