Domestic stock market volatility intensifies amid US-Iran tensions... KOSPI continues to decline

The domestic stock market reopened after the three-in-one holiday, with the market closely watching whether the US-Iran war will hinder the KOSPI’s rebound attempt. On February 27, the KOSPI closed at 6,244.13 points, down 1% from the previous trading day. Foreign investors sold 7.1037 trillion won, putting pressure on the index, while retail investors net bought 6.2824 trillion won for defense.

In the New York stock market, news of a full-scale US-Iran war over the weekend initially triggered a decline in early trading. However, after the outbreak, uncertainty decreased, leading to strong buying at lower levels. The Nasdaq opened down 1.6% but narrowed its losses as investors judged that uncertainty had been alleviated. Under these circumstances, combined with President Trump’s tough stance, some analysts believe Iran’s influence will be weakened.

On the domestic front, the battle between foreign and retail investors may continue. Especially considering the responses of various countries and the possibility of increased oil production by oil-producing nations, the current geopolitical tensions are not expected to cause significant stock market volatility. Some experts point out that the KOSPI has already shown signs of overheating and warn of risks from geopolitical tensions, AI, and macroeconomic variables.

Considering the current tense situation and market reactions, the KOSPI is likely to continue fluctuating. Investors should closely monitor external uncertainties and adopt strategies to cope with short-term volatility. In the medium to long term, if geopolitical risks ease, it will be worth watching whether Asian stock markets, represented by the KOSPI, can return to stability.