KOSPI crossed the 6,000 mark last week (Feb. 23–27) on semiconductor momentum and the National Assembly's passage of the third Commercial Act amendment. This week (Mar. 2–6), factors such as the fallout from the U.S. airstrike on Iran and the release of major domestic and overseas economic indicators are waiting in the wings to heighten market volatility. It is expected to test whether the basic strength of Korea's economy and industry can support the recent sharp rally in the stock market.
The KOSPI index climbed once again to a historic high last week. On the 24th, it hit 5,900 points at the close, then surpassed 6,000 points at the close the next day. It was 18 trading days after it exceeded 5,000 points.
On the 26th, it "stamped through" 6,100 points, 6,200 points, and 6,300 points in a single day. On the last trading day, the 27th, foreigners were net sellers of more than 7 trillion won, but individuals absorbed the supply and defended the 6,200 level.
However, as geopolitical risk in the Middle East surged sharply on the 28th during the market holiday, the possibility of increased volatility in the domestic stock market grew. The United States and Israel simultaneously bombed three facilities, including in Tehran, Iran's capital, where Iran's leadership had gathered, and during this process came word that Supreme Leader Ayatollah Khamenei had died. There are concerns that if the Middle East situation destabilizes, risk-off sentiment could spread and prices of major assets such as stocks, oil, and Bitcoin could swing.
Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "Because the domestic market is closed on the 2nd, the market opening on the 3rd is expected to reflect the global financial markets of the 2nd," adding, "However, considering the movements of the domestic market over the past two weeks, if a price correction occurs, there is a high possibility that 'dip-buying' flows led by individual investors will come in."
Economic indicators to gauge domestic and overseas conditions are also set for release. First, on the 1st, Korea's February export and import trends will be announced. In particular, it will be important whether semiconductor exports continue to set all-time highs.
Kim Yu-mi, a researcher at Kiwoom Securities, said, "Due to fewer working days from the Lunar New Year holidays, the year-over-year growth rate is expected to slow," but added, "Given that as of the 20th exports recorded the highest level on record for the month and the favorable semiconductor cycle, the overall uptrend in exports should hold."
She went on to say, "The export data will serve as a chance to reconfirm that semiconductor demand remains solid despite uncertainty surrounding the recent artificial intelligence (AI) investment cycle."
On the 4th, China's Two Sessions (National People's Congress of China and the Chinese People's Political Consultative Conference) open. Attention is focused on whether China will set a target for economic growth and present measures to support domestic consumption. On the same day, China's National Bureau of Statistics will also release the manufacturing and services Purchasing Managers' Index (PMI). The market expects the manufacturing index to slow from the previous month and the services index to rise slightly.
Jeong Hae-chang, a researcher at Daishin Securities, said, "If the Chinese government injects large-scale fiscal spending and signals a strong commitment to boosting domestic demand, beneficiaries along the paths of fiscal outlays could come into the spotlight."
U.S. jobs data are also scheduled. On the 4th, the ADP private employment report is due, and on the 6th, the U.S. nonfarm payrolls report will be released. The market expects a mixed outcome in which private employment improves slightly while nonfarm job gains slow and the unemployment rate edges up.
Researcher Kim Yu-mi analyzed, "If labor market indicators show mixed results, they may not provide clear guidance on the Federal Reserve's monetary policy," adding, "However, if assessments strengthen that demand is continuing to slow, that could act as a downward factor for market interest rates."
Meanwhile, in the domestic market, there are concerns that the momentum (upward driver) of related stocks could fade as the third Commercial Act amendment passed the National Assembly's plenary session last week. Na Jeong-hwan, a researcher at NH Investment & Securities, explained, "Ahead of shareholder meeting season, shareholder proposals may increase, and demands for shareholder returns could intensify, especially among corporations with high treasury share ratios."