KOSPI pauses near record high amid US-Iran ceasefire caution

Dealers work at the dealing room of Hana Bank headquarters in Seoul, Friday. Yonhap

The KOSPI took a breather Friday, ending a three-session rally as investors turned cautious amid concerns that U.S.-Iran peace talks may take longer than expected.

Despite the pause, local analysts say the stock market remains on track to reach fresh record highs, supported by easing geopolitical tensions and a strong rebound in the semiconductor sector.

The country’s benchmark index extended its gains for a third straight day on Thursday, finishing above the 6,200 mark at 6,226.05 on optimism over a potential diplomatic breakthrough in the Middle East. It continued the rally Friday morning, opening higher at 6,227.33, up 0.02 percent from the previous close, but quickly lost momentum and closed at 6,191.92, down 34.13 points, or 0.55 percent.

The KOSPI’s record closing high stands at 6,307.27, set on Feb. 26, while its intraday peak of 6,347.41 was reached on Feb. 27.

The secondary Kosdaq index opened at 1,166.78, up 3.81 points, or 0.33 percent, from the previous session, and finished the session at 1,170.04, up 7.07 points, or 0.61 percent.

The Korean won also came under pressure. In the Seoul foreign exchange market, it opened at 1,481.4 per dollar, weakening 6.8 won from the previous close, and ended onshore trading at 1,483.5 per dollar, down 8.9 won.

Hopes for a second round of ceasefire talks between the United States and Iran as early as this weekend, along with a 10-day truce between Israel and Lebanon, have helped ease market tensions.

U.S. President Donald Trump told reporters at the White House that Washington is nearing an agreement with Iran, adding that follow-up talks could take place within days.

At the same time, lingering concerns that negotiations between Washington and Tehran could lose momentum have surfaced, putting upward pressure on global oil prices.

Brent crude for June delivery jumped 4.7 percent to settle at $99.39 per barrel, while U.S. West Texas Intermediate crude for May delivery rose 3.7 percent to $94.69 per barrel.

Despite the KOSPI’s pullback, optimism remains firmly intact, supported by improving underlying fundamentals.

The index is currently valued at a 12-month forward price-to-earnings ratio (PER) of about 7.55 times, as forward earnings per share have surged, reinforcing the market’s fundamental strength. Applying a forward PER of eight times would imply an upside target near the 6,600 level.

Market watchers note that a wide disconnect persists between corporate earnings and current valuations in Korea. They believe the undervaluation is likely to correct over time, provided there is no sharp economic slowdown or downward revision in earnings outlooks.

SK hynix’s first-quarter results, scheduled for release on April 23, are widely seen as a key catalyst that could determine the KOSPI’s next upward trajectory.

In the wake of Samsung Electronics’ better-than-expected earnings guidance, market expectations for SK hynix have risen sharply, with its projected first-quarter operating profit now approaching 40 trillion won ($27 billion).

If actual results come in above this level, it would likely further strengthen the case for a KOSPI valuation rerating.

Han Ji-young, an analyst at Kiwoom Securities, said that although the recent rally has lost some momentum, the broader bullish trend remains intact.

“Breaking above the previous record high is no longer a question of possibility, but timing. Even if the index ends lower today, the overall momentum still points to continued upside potential and the likelihood of reaching new highs in the near term,” Han said.