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🇰🇷 South Korea /Economy & Trade

Global Markets Shake Off 'Trump Tacos,' Recover to Pre-War Levels

From Hankyoreh · (5h ago) Korean Positive tone

Translated from Korean, summarized and contextualized by DistantNews.

TLDR

  • Global financial markets have recovered to pre-conflict levels, erasing losses incurred during the recent US-Iran tensions.
  • Stock indices in South Korea, the US, and Taiwan reached their highest points since late February, reflecting increased investor confidence.
  • Analysts attribute the market's resilience to expectations that extreme conflict scenarios are unlikely, despite ongoing geopolitical complexities.

The global financial markets are demonstrating remarkable resilience, rapidly recovering to levels seen before the recent escalation of tensions between the United States and Iran. This swift rebound suggests that investors have largely shrugged off the geopolitical risks associated with the conflict, particularly concerning the Strait of Hormuz. Stock indices worldwide have erased earlier losses, signaling a return to pre-conflict trading ranges, specifically around February 27th.

In South Korea, the KOSPI closed at 6226.05, marking a significant increase of 2.21% from the previous trading day. The index surpassed the 6200-point mark and briefly touched 6231.03, with the total market capitalization exceeding 5100 trillion won. The KOSPI 200 futures also reached their highest closing value since February 27th. This recovery mirrors trends in major international markets. The US markets saw the S&P 500 index rise by 0.80% to close above 7000 points for the first time, while the Nasdaq Composite reached its highest point in six months.

Asian markets, which were particularly vulnerable due to their reliance on Middle Eastern crude oil, have also bounced back. Japan's Nikkei 225 saw a gain of over 2%, surpassing the psychologically important 59,000-point level. Taiwan's Taiex index reached an all-time high, breaking through the 37,000-point mark. This broad-based recovery indicates a widespread return of investor confidence.

Market analysts are pointing to a growing expectation that extreme negative outcomes, such as a full-blown war or a prolonged naval blockade, are unlikely. Kim Seok-hwan, a researcher at Mirae Asset Securities, noted, "The market's rapid rebound is driven by the expectation that the possibility of extreme worsening of the situation is not high." This sentiment suggests that while geopolitical risks remain, the market is pricing in a more moderate resolution to the current standoff, allowing for a return to pre-crisis valuations.

The market's rapid rebound is driven by the expectation that the possibility of extreme worsening of the situation is not high.

— Kim Seok-hwanResearcher at Mirae Asset Securities, explaining the market's recovery.
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Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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