[R&E] Global Oil Prices Plunge on Middle East Ceasefire Hopes... Domestic Stock Market Rallies Led by Semiconductors and Construction

[R&E: Research & Epoch]

This is News Epoch's signature report that provides a perspective on a new era of investment by comprehensively analyzing global financial data and domestic securities firm research.

Global Market Brief

Expectations for the easing of geopolitical risks in the Middle East led the U.S. stock market to a strong rally yesterday. As news broke that a two-week ceasefire negotiation between the United States and Iran is underway, West Texas Intermediate (WTI) crude futures plunged 16.41% to $94.41 per barrel, and Brent crude also dropped 13.29% to $94.75, falling below the $100 per barrel mark. The sharp decline in oil prices is a key factor in relieving the burden of energy costs and easing inflationary pressure.

Accordingly, risk asset preference spread, and major indices in the New York stock market rose across the board. The S&P 500 index rose 2.51% to 6,782.81 pt, and the NASDAQ index also climbed 2.80% to 22,634.99 pt. The Dow Jones index jumped 2.85% to 47,909.92 pt. In particular, the Philadelphia Semiconductor Index surged 6.34% to 8,510.92 pt, leading the strength of technology stocks. Intel (NASDAQ: INTC) rallied to a five-year high, recording the second-highest performance within the S&P 500. The fact that Federal Reserve officials maintained their stance on interest rate cuts this year despite uncertainties in the Middle East situation also supported investment sentiment.

The US 10-year Treasury yield fell 0.2 bp to 4.2911%, and the Dollar Index dropped 0.86% to 98.996. The weak dollar is expected to accelerate the inflow of foreign funds into the domestic stock market. Meanwhile, Meta (NASDAQ: META) launched a new large language model 'Muse Spark,' and Alibaba (NYSE: BABA) built a data center equipped with 10,000 of its own chips for AI training, indicating that global big tech companies' AI investment competition is a definitive trend that will continue.

Domestic Market Summary

The previous day's rally in the New York stock market and the plunge in oil prices due to the easing of Middle East geopolitical risks drove an explosive rise in the domestic stock market today. KOSPI surged 6.87% to 5,872.34 pt, and KOSDAQ rose 5.12% to 1,089.85 pt. This is the result of significantly strengthened foreign buying as risk asset preference flowed into the domestic market. The KRW/USD exchange rate fell 24.1 won from the previous trading day to 1,478.0 won, which is a positive signal for foreign investment inflows due to the transition to a stronger won.

The domestic bond market is also strong. The 3-year government bond yield fell 12.6 bp to 3.320%, and the 10-year bond yield dropped 12.3 bp to 3.632%. This reflects alignment with the global downward trend in bond yields, as well as expectations for easing domestic inflationary pressure and an interest rate cut. The average daily trading volume in the domestic market in the first quarter of 2026 surged to 67 trillion won, up 258.3% year-on-year and 75.7% quarter-on-quarter. Customer deposits at the end of March increased by 88.6% year-on-year to 110 trillion won, and the margin loan balance also rose by 82.5% to 34 trillion won. This proves that abundant liquidity has flowed into the domestic market, bringing investment sentiment to a peak.

Key Industry Issues and Insights

The Semiconductor sector showed strength at home and abroad, boosted by the global technology stock rally. While the US Philadelphia Semiconductor Index rose 6.34%, domestically, Samsung Electronics (KRX: 005930) surged 7.1%, and SK hynix (KRX: 000660) jumped 12.8%. In particular, SK hynix is highly likely to achieve 40 trillion won in operating profit in the first quarter, and analysts suggest that the 101% quarter-on-quarter increase in the average selling price of commodity DRAM and the 77% increase in the average selling price of NAND played a key role. This indicates that price rebounds in legacy products as well as high-value-added products are driving overall profitability improvement. Samsung Electro-Mechanics (KRX: 009150) is also expected to see a 12% year-on-year increase in revenue and a 34% increase in operating profit in the first quarter, and its target stock price has been raised accordingly. On the other hand, ISU Petasys (KRX: 007660) reported a first-quarter operating profit of 64.6 billion won, up 35.5% year-on-year, but it fell short of the market expectation of 68.3 billion won.

The Construction sector showed a strong stock price trend along with earnings announcements that exceeded market expectations. Hyundai E&C (KRX: 000720) recorded a consolidated operating profit of 176.8 billion won in the first quarter, beating the market expectation of 158.3 billion won, and its stock price surged 21.0%. This is the result of stable profitability in the overseas plant business and solid trends in the domestic housing sector driving performance. GS E&C (KRX: 006360) hit the upper limit (20.3%) despite recording a first-quarter operating profit of 101.8 billion won, which fell short of expectations. As revealed by the recent 15.8% year-on-year increase in real estate project financing (PF) credit offerings in March, this is considered a result reflecting expectations of risk mitigation and an improvement in investment sentiment across the construction industry.

The Securities sector is strong, supported by the surge in trading volume and the recovery of investment sentiment in the domestic market. As the average daily trading volume in the domestic market surged 258.3% year-on-year in the first quarter, an increase in commission income for securities firms is certain. Kiwoom Securities (KRX: 039490) was picked as the top pick in the sector, rising 12.2% from the previous trading day. This is because it has a structure that directly benefits from the market boom based on its high domestic market share.

The Steel sector is showing a complex pattern with mixed earnings and market signals. SeAH Steel (KRX: 306200) recorded first-quarter revenue of 442.8 billion won, up 16.9% year-on-year, but its operating profit decreased by 30.7% to 17.7 billion won. However, it slightly exceeded market expectations. Conversely, Hyundai Steel (KRX: 004020) swung to a profit year-on-year with a first-quarter operating profit of 45.5 billion won, but significantly underperformed the expectation of 119.4 billion won. Sluggish demand in downstream industries remains a burden on the steel industry, as total demand for rebar in 2025 is analyzed to hit an all-time low since 2000.

Market Signals

• Domestic Stock Market Surge: KOSPI recorded 5,872.34 pt (up 6.87%), KOSDAQ 1,089.85 pt (up 5.12%).

• KRW/USD Exchange Rate Decline: Plunged 24.1 won from the previous trading day to 1,478.0 won, demonstrating a strong won.

• Trading Liquidity Explosion: Q1 average daily trading volume was 67 trillion won, up 258.3% year-on-year.

• Global Oil Price Plunge: WTI crude futures fell to $94.41 per barrel (down 16.41%), breaking below the $100 mark.

• Global Semiconductor Strength: The Philadelphia Semiconductor Index led the technology stock rally at 8,510.92 pt (up 6.34%).

Epoch View: Investment Implications

The plunge in oil prices and the easing of geopolitical risks triggered by progress in the Middle East ceasefire negotiations strongly stimulated global risk asset preference. This led to a rally in the US stock market centered on technology stocks, and the domestic stock market also responded with a simultaneous surge in economically sensitive sectors such as semiconductors and construction, accompanied by abundant liquidity inflows. In particular, the explosive increase in domestic average daily trading volume and customer deposits proves the market's strong energy. However, performance differentiation by sector, such as sluggish demand in the steel industry, remains a challenge. The future direction of the market is expected to be determined by whether oil prices continue to stabilize and the Federal Reserve's interest rate cut path.

This content was created through News Epoch's proprietary AI algorithm, which tracks and analyzes public data from research centers of major domestic securities firms and global financial media in real-time. It is an objective summary based on collected data, and it is clarified that it is not an investment solicitation or recommendation for specific stocks.