Traders at the New York Stock Exchange in the United States [Photo=Yonhap News]

 Money Radar

The global financial market in the second week of March (March 9-13) moved amidst geopolitical shocks of escalating tensions in the Middle East and a sharp rise in international oil prices. 

The surge in oil prices reignited inflation concerns, putting upward pressure on interest rates and the dollar. As financial market volatility also expanded, capital flowed out of some risk assets and shifted towards energy and supply chain-related industries, as well as technology stocks centered on AI infrastructure.

International oil prices were the key variable in the market this week. 

Brent crude prices surpassed the $100 per barrel mark amid heightened Middle East tensions, and West Texas Intermediate (WTI) also rose to around $90. 

The market is closely watching the possibility that tensions surrounding the Strait of Hormuz could lead to actual disruptions in crude oil supply. This strait is a strategic maritime passage through which approximately 20% of the world's crude oil transport passes.

The rise in oil prices directly impacted the interest rate market. 

As concerns that inflation could resurface grew, U.S. Treasury yields faced upward pressure. The yield on the 10-year U.S. Treasury note rose to the 4.2% range during the week, with the 2-year yield also increasing. This signifies a partial retreat in expectations for interest rate cuts by the Federal Reserve (Fed).

The dollar also maintained its strength. 

The Dollar Index (DXY) faced upward pressure amid a preference for safe-haven assets, and the won-dollar exchange rate also surged. The won-dollar exchange rate rose to the 1490 won range intraday, reflecting the possibility of foreign capital outflows. The typical pattern of capital flowing into the dollar during periods of escalating geopolitical risk reappeared.

Market volatility indicators also experienced upward pressure. 

The VIX index, known as the "fear index" for the U.S. stock market, rose in response to war news and the surge in oil prices. However, the financial market remained in a phase of limited volatility expansion rather than a full-blown fear market.

The direction of capital movement was also clear. 

There was an inflow of funds into industries related to energy and supply chains. This is because in times of war, not only energy but also food and raw material prices often rise together. This is why companies related to fertilizers and agricultural commodities are attracting market attention.

Conversely, capital outflows were observed in the financial and consumer-related sectors. High oil prices and rising interest rates tend to dampen both consumer and investment sentiment.

What's interesting is that technology stocks related to AI infrastructure maintained relative strength. 

Companies involved in semiconductors and data centers maintained investors' long-term growth expectations despite geopolitical risks. This indicates that while the market is managing short-term risks, the flow of investment in AI-centric technology remains robust.

Summarizing the financial market trends this week, defensive capital flows in response to war risks were observed in the short term, but long-term capital appears to have not abandoned the growth theme centered on technology infrastructure and semiconductors.

| Variable    |        Key Indicator           |  Market Signal |

| Oil Price    | Brent Breaks $100  | War Risk |

| Interest Rate    | U.S. 10-Year at 4.2%     | Inflation Concerns |

| Dollar    | Won-Dollar at 1490 Won     | Safe-Haven Flow |

| Volatility  | VIX Rises                   | Financial Market Tension |

Capital Rotation Radar

In the second week of March (March 9-13), global financial markets saw distinct capital movements amidst geopolitical risks and a sharp rise in energy prices. 

With both rising international oil prices and a strengthening dollar occurring simultaneously, investors withdrew funds from some risk assets while reallocating positions towards energy and supply chain-related industries, as well as technology stocks focused on AI infrastructure.

The most evident capital inflow was into the energy sector. 

As Middle East tensions escalated and military uncertainty around the Strait of Hormuz increased, international oil prices surged. Consequently, refining and energy infrastructure companies showed relative strength in the market. Investors often choose energy companies as defensive investments due to expectations of improved cash flow during wartime.

Industries related to supply chains also received capital inflows. 

When wars or geopolitical tensions escalate, not only energy but also food and raw material prices tend to rise. For this reason, fertilizer and agricultural commodity companies have once again begun to attract market attention. This is a typical investment trend observed whenever global supply chains are shaken.

Conversely, capital outflows were observed in the financial and consumer-related sectors. 

This is because high oil prices and rising interest rates can dampen consumer sentiment and increase risks in the financial markets. Notably, the global financial market has seen a slight contraction in investment sentiment towards financial stocks, as the potential risks in the private credit market have recently come to the fore.

What's interesting is that technology stocks related to AI infrastructure maintained a relatively firm trend. 

Semiconductor, data center, and cloud infrastructure companies maintained investors' long-term growth expectations even as geopolitical risks expanded. This is interpreted as the market not abandoning the investment cycle in AI-centric technologies while responding to short-term risks.

These trends reflect recent characteristics of the financial market. 

In the past, major capital outflows from risk assets were common during wars or geopolitical shocks. However, the recent market has seen a dual structure of capital movement, attracting funds to both defensive and growth sectors simultaneously.

In the short term, the energy and supply chain sectors are acting as hedges against geopolitical risks, while in the long term, the AI infrastructure and semiconductor industries are serving as the central pillars maintaining the technology investment cycle.

Ultimately, this week's financial market can be interpreted not simply as a phase of risk aversion, but as a process of investors readjusting their portfolios between geopolitical risks and technological growth. 

The energy and supply chain sectors are being chosen as short-term defensive assets, while AI infrastructure companies are simultaneously being selected as long-term growth assets.

| Variable | Key Indicator | Market Signal |

| --- | -------------- | -------- |

| Oil Price | Brent Breaks $100 | War Risk |

| Interest Rate | U.S. 10-Year at 4.2% | Inflation Concerns |

| Dollar | Won-Dollar at 1490 Won | Safe-Haven Flow |

| Volatility | VIX Rises | Financial Market Tension |

Radar Insight

The defining characteristic of capital movements in the financial markets this week was the simultaneous occurrence of two trends: "response to war risk + maintenance of technology investment." 

The energy and supply chain industries were chosen as defensive investments to counter short-term risks, while semiconductor and AI infrastructure companies remained assets reflecting the long-term technology investment cycle.

This demonstrates that global capital is maintaining a structural investment trend centered on technology infrastructure, even amidst geopolitical shocks.