The KOSPI index has moved away again from the 8,000-point "summit." On the 15th, the KOSPI hit 8,000 points, then immediately plunged 6% and fell below the 7,500 level. With overheating concerns from a rapid short-term surge and domestic and external risks still in place, investors are focused on whether it can reach "palcheonpi" again this week.
This week (the 18th-22nd), the market is expected to see large swings similar to last week. The U.S.-Iran agreement remains at an impasse, and in Korea, concerns are being raised that the Samsung Electronics strike risk could drag on.
Last week, the KOSPI index continued its upward trend on the back of a tech rally in the U.S. market and expectations of an improvement in the memory cycle. Samsung Electronics and SK hynix climbed to the "290,000 Jeonja" and "2 million Nix" summits.
But the road to 8,000 points was not entirely smooth. With domestic and external risks such as the Middle East war and the Samsung Electronics strike continuing, remarks by Presidential Policy Chief Kim Yong-beom on "national dividends" on the 12th added to the mix, and the index repeatedly saw sharp swings. The index topped 8,000 intraday on the 15th but soon fell and closed at 7,493.18.
The biggest event this week is Nvidia's earnings release on the 20th. As Big Tech corporations such as Microsoft (MS), Amazon and Google continue to ramp up investment in artificial intelligence (AI), rivals including AMD and Intel also beat expectations. Attention is on whether Nvidia will also post a "surprise earnings" result.
Nvidia's earnings release is expected to be a key variable for investor sentiment toward AI-related stocks, including Samsung Electronics and SK hynix.
Na Jeong-hwan, a researcher at NH Investment & Securities, said, "For Nvidia's earnings, the points to watch are whether guidance reflects China sales, the sustainability of Blackwell demand, whether supply bottlenecks are easing, and the ability to defend margins," adding, "In particular, we need to pay attention to the corporation's stance on whether the resumption of China sales is a sustainable trend."
On the 21st, the minutes of the Federal Open Market Committee (FOMC) from last month's U.S. Federal Reserve Board meeting will be released. At the April meeting, 3 of the 12 members were said to have supported holding rates steady but opposed maintaining the dovish-leaning language. Analysts say that if the minutes confirm the influence of hawkish members, expectations for rate cuts could be further dampened.
Kim Yu-mi, an economist at Kiwoom Securities, said, "If inflation indicators continue to come in above expectations as they have recently, the influence of hawkish members could grow," adding, "We need to use these minutes to gauge the internal mood of the Fed and the direction of policy."
Domestically, the Samsung Electronics strike risk is a key variable. With the Samsung Electronics union announcing a general strike on the 21st, the possibility of the government invoking emergency adjustment powers is being discussed. Na said, "If there's a deal, expense burdens are a concern, and if there's a strike, it could lead to production disruptions, so it will act as a headwind for Samsung Electronics' earnings."
Whether there will be sector rotation is also a crucial factor in retaking 8,000 points. Although the domestic market rallied rapidly to 8,000 points last week, on the 15th the two large-cap semiconductor stocks, Samsung Electronics and SK hynix, fell more than 8%, and the index slid back to the 7,500 level.
Yoo Myeong-gan, a researcher at Mirae Asset Securities, said, "The deepening bias toward large caps is a burden," adding, "The KOSPI's 12-month forward price-earnings ratio (PER) is 8.1 times, which makes valuations attractive, but excluding Samsung Electronics and SK hynix it is 11.5 times, above the past average of 10.0 times."
In the securities industry, forecasts for the KOSPI are being raised one after another. KB Securities set this year's KOSPI target at 10,500 points.
Lim Jeong-eun, a researcher at KB Securities, said, "There is a possibility of a short-term correction due to overheating," while adding, "We judge that signs of a bubble burst, such as a collapse of the economic cycle or a sudden spike in interest rates, are unlikely to appear in the near term."