KOSPI Plunges 3% as Middle East War Fears Threaten 5,000-Point Support

*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an 'AI-based customized news recommendation and summary service' developed with support from the Korea Press Foundation. It selects and provides six tailored news stories for each reader type.

1. DRAM Prices Jump 10-Fold and HBM Sells Like Hotcakes… Samsung Electronics Rides Megacycle for 'Quantum Jump'

- Key Summary: Expectations for a semiconductor supercycle are intensifying ahead of Samsung Electronics' first-quarter preliminary earnings announcement. DDR4 8Gb DRAM prices stood at $13 per unit as of late February, a 9.6-fold surge from $1.35 in the same period last year. The industry estimates first-quarter DRAM revenue will exceed 45 trillion won. HBM revenue also surpassed 3 trillion won in Q1, more than tripling year-on-year. With DRAM and HBM profit margins approaching 70%, first-quarter memory operating profit alone is projected to exceed 40 trillion won. The financial investment industry forecasts that as HBM4 shipments begin in earnest from Q2, quarterly operating profit will reach 50 trillion won and surpass 60 trillion won in Q3.

2. Oil Prices and Exchange Rates Soar, Asian Markets Slide… KOSPI's Psychological Support Line in Jeopardy

- Key Summary: The KOSPI closed at 5,277.30, down 161.57 points (2.97%) from the previous trading day on concerns over the widening Middle East war, after falling as low as 5,154.16 intraday. Brent crude futures surged to $115.09 per barrel following the official entry of Yemen's Houthi rebels into the conflict. Foreign investors continued net selling on the main bourse for eight consecutive trading days, offloading 32.0687 trillion won this month alone. Short-selling balances reached 16.097 trillion won, surpassing the 16 trillion won mark for the first time since short selling resumed last year. Major market-cap stocks including SK hynix (000660.KS) (-5.31%) and Samsung Electronics (-1.89%) fell sharply. Experts view the KOSPI 5,000 level as a psychological support line but warn that further declines are inevitable if worst-case scenarios such as the deployment of U.S. ground troops materialize.

3. One Month of War: 'Group ETF Fortunes Diverge'… Hanwha (000880.KS) Holds Firm, Hyundai Motor (005380.KS) and Samsung Weaken

- Key Summary: As the U.S.-Iran confrontation approaches its one-month mark, domestic conglomerate group ETF returns are diverging sharply depending on industrial structure. Over the past month, 'TIGER Hyundai Motor Group Plus' posted the lowest return at -24.55%, followed by 'RISE Top 5 Group Stocks' (-19.68%), 'KODEX Samsung Group' (-15.63%), and 'TIGER LG Group Plus' (-13.80%), all recording double-digit losses. In contrast, 'PLUS Hanwha Group Stocks,' which has a high weighting in defense and energy, limited its loss to -8.7%, the only group ETF to stay in single-digit loss territory. Surging oil prices driven by the worsening Middle East situation are also fueling a rebound in the battery sector. Woori Asset Management plans to list 'WON Doosan Group Focus,' structured around semiconductors, power infrastructure, and unmanned systems, as a domestic first on the 31st.

4. Won-Dollar Exchange Rate Enters 1,520-Won Range in Extended Trading

- Key Summary: The won-dollar exchange rate climbed to as high as 1,521.1 won during after-hours trading on the 30th, breaking through the 1,520 won level and approaching its highest level in approximately 17 years since March 2009. Daytime trading closed at 1,515.7 won, up 6.8 won from the previous trading day, but the won weakened further in after-hours trading amid broader weakness in major currencies. Concerns over trade balance deterioration from Middle East instability and surging oil prices, combined with large-scale net selling of equities by foreign investors, have collectively pushed the exchange rate to a new level. Meanwhile, the yen-dollar rate also breached the 160-yen level early in the session, hitting its highest in one year and eight months, before reversing lower following verbal intervention by Japanese authorities.

5. All Eyes on March CPI… High Exchange Rate and Supplementary Budget Could Push Q2 Into 3% Range

- Key Summary: Global investment banks forecast that the March consumer price index (CPI) growth rate will reach 2.4% year-on-year as the impact of surging oil prices is fully reflected in consumer prices. CPI growth had declined from 2.4% in October last year and held at 2.0% through February this year, but is expected to rebound in March reflecting the sharp rise in energy prices, with a month-on-month increase of 0.6% projected — the highest since January 2025. With the won-dollar exchange rate surpassing the 1,500 won level for the first time in 17 years and pushing up import prices, concerns are mounting that a supplementary budget of around 25 trillion won could further stoke inflationary pressure by stimulating aggregate demand. iM Securities analyzed that given Korea's high energy import dependence, second-quarter CPI growth is highly likely to enter the 3% range.

6. U.S. Treasury Turns Its Eye to Private Credit

- Key Summary: The U.S. Treasury Department is moving to address risks in the private credit market alongside insurance regulators, planning to hold regular meetings starting in Q2 this year. According to PitchBook, the U.S. private credit market has tripled in size since 2015 to reach $1.3 trillion (approximately 1,970 trillion won), having operated outside the regulatory oversight of the Securities and Exchange Commission (SEC) or the Federal Reserve (Fed). Treasury Secretary Scott Bessent has identified as problematic the structure whereby private credit managers' assets migrate to regulated financial institutions such as pension funds, banks, and insurers. The transfer of credit risk between banks through "synthetic risk transfer (SRT)" has emerged as a key issue. The International Monetary Fund (IMF) estimates that risks have been transferred via SRT across approximately $1 trillion (approximately 1,516 trillion won) in global private credit assets. Distressed asset specialists view the current environment as the best investment opportunity since the 2008 financial crisis.