[Weekend Money] 'Roller-KOSPI' Shaky Market, The Path Becomes Clear When You Look at ○○

Last week, the domestic stock market experienced historic volatility as it absorbed the Iran-driven geopolitical shock. It appears that the market has effectively priced in the worst-case scenario, confirming its technical and psychological bottom.

On the 5th, an employee is monitoring the stock market and exchange rates in the dealing room at the Seoul Hana Bank headquarters. Photo by Jo Yongjun

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According to Daishin Securities on March 8, the apparent cause of market fluctuations was fear over the prolonged Middle East crisis. However, the underlying reason is interpreted as a correction phase, in which accumulated fatigue from a 50% surge over two months without any pullback erupted all at once to cool down overheated conditions. During the decline, the KOSPI’s low of 5,059 was recorded, translating to a forward price-to-earnings ratio (PER) of 8.06 times-this is the strongest valuation support zone since the 2008 financial crisis.

For the time being, the market is expected to closely monitor developments in the Middle East crisis. In particular, the most critical variable will be whether the closure of the Strait of Hormuz-a key artery for global energy transport-continues. The market is expected to respond sensitively to trends in oil and natural gas prices. However, since both the Trump administration and Iran would face significant economic burdens from a prolonged closure of the strait, de-escalation through negotiations is considered the more rational scenario at present. While strong rhetoric and displays of force aimed at increasing bargaining power are likely to continue, leading to inevitable short-term volatility, it is necessary to establish portfolio strategies tailored to each scenario in response.

As unpredictable geopolitical noise subsides, the market’s attention is shifting back to macroeconomic indicators. Next week, key data on employment and inflation-the two main pillars of monetary policy-will be released in succession. Recently, the U.S. employment market has been showing gradual improvement, and concerns over inflationary pressures driven by tariffs have also been easing.

The KOSPI is expected to seek a turnaround based on solid earnings fundamentals and valuations. According to Daishin Securities researchers Jeong Haechang and Lee Kyungmin, “Even when calculated based on the 5,600 mark, the forward PER is only 8.9 times, making the price attractive. In the medium to long term, it is necessary to use the current volatility as a buying opportunity, focusing on leading stocks in semiconductors, defense, shipbuilding, and automobiles with robust earnings trends, as well as in sectors where a business turnaround is becoming evident, such as chemicals and secondary batteries.”

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