[Good Morning Market] Despite Confusion in Middle East Ceasefire Talks... Rotation Expected in Korean Stock Market

Overnight, U.S. stock markets fell slightly as ceasefire negotiations between the United States and Iran became increasingly uncertain. While factors such as the re-blockade of the Strait of Hormuz and the subsequent rise in oil prices are weighing on stock prices, some analysts predict that the Korean stock market will see a rotation among leading sectors driven by expectations for the earnings season.

On April 20 (local time), the Dow Jones Industrial Average on the New York Stock Exchange (NYSE) closed at 49,442.56, down 4.87 points (0.01%) from the previous session. The S&P 500 index closed at 7,109.14, down 16.92 points (0.24%), while the technology-heavy Nasdaq Composite fell 64.09 points (0.26%) to 24,404.39.

On the 20th, the KOSPI index opened at 6213.92, up 22 points from the previous trading day, displayed on the electronic board at the Hana Bank headquarters dealing room in Jung-gu, Seoul. On the same day, the won-dollar exchange rate started trading at 1479.5 won, down 4 won from the previous trading day. April 20, 2026, Photo by Kang Jinhyung

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U.S. President Donald Trump stated that the ceasefire deadline with Iran, previously thought to be April 21, is actually the evening of April 22 Eastern Time. However, tensions remain high right up to the negotiations, due to actions such as the U.S. Navy re-blockading Iranian waters and Iran re-blockading the Strait of Hormuz.

As a result, international oil prices rebounded. On April 20, at the London ICE Futures Exchange, Brent crude oil futures for June delivery settled at $95.48 per barrel, up $5.10 (5.64%) from the previous session. West Texas Intermediate (WTI) crude oil futures for May delivery on the New York Mercantile Exchange rose $5.76 (6.87%) to close at $89.61 per barrel over the same period.

However, the impact of the ongoing war on the Korean stock market is expected to be limited. Han Ji-young, a researcher at Kiwoom Securities, stated, "On April 21, despite growing wait-and-see sentiment regarding U.S.-Iran negotiations and weakness in U.S. tech stocks, the KOSPI 200 night futures showed a strong gain of about 1.1%. Supported by expectations for the first-quarter earnings season, the index is expected to show a limited downside while rotation among leading sectors continues."

The KOSPI closed at 6,219.09 in the previous session, recovering to the 6,200 level seen prior to the outbreak of war. Han added, "Although uncertainties regarding the ceasefire negotiations and Strait of Hormuz operations will persist on April 22, this shows that the stock market is becoming less sensitive to war-related risks."

The fact that foreign investors have shifted to net buying this month and are pouring funds into sectors outside of semiconductors is also seen as a factor contributing to the rotation among sectors. So far this month, foreign investors have made net purchases of about KRW 2.8 trillion in semiconductors and have also invested about KRW 1.2 trillion in non-semiconductor sectors. Han noted, "Compared to previous episodes of net foreign buying, the breadth of inflows has expanded," and added, "The earnings momentum of leading semiconductor stocks appears to be attracting passive foreign investment."

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