A Busy Week Ahead: "KOSPI 3140~3240" Turtle-like Rise... Steel and Chemical Leading Sectors

[Asia Economy Reporter Lee Seon-ae] Korea Investment & Securities forecasts that next week the KOSPI band will move within 3140~3240, rising at a slow pace. Although there are various variables, the market is expected to be favorable.

According to Korea Investment & Securities on the 1st, the first quarter earnings season will pass its peak next week (3rd~7th). Most companies will announce their earnings, and there is a high possibility that surprises and shocks will be mixed. This will offset positive and negative factors, making it difficult for the KOSPI to show a clear direction. However, looking at companies that have already disclosed their earnings, they have reported better-than-expected figures, so the index is more likely to tilt toward an increase rather than a decline.

Other variables are also favorable to the stock market. Korea is inevitably influenced heavily by the U.S., but recently, uncertainty in the U.S. stock market has not expanded, so Korea is unlikely to experience sharp volatility. The Federal Reserve's Federal Open Market Committee (FOMC) also played a significant role in dispelling market concerns. Monetary policy maintained an easing stance, and Federal Reserve Chair Jerome Powell drew a line by stating that tapering will not occur for the time being. In the U.S., the financial stress index and the VIX, which relates to fear sentiment, have been stabilizing downward, and due to the Fed's stimulus stance, this trend may continue a bit longer. This can translate into a favorable outcome for the Korean market, which is influenced by U.S. trends.

The leading sectors in the market are expected to remain economically sensitive materials, especially steel and chemicals, next week as well. Recently, these two sectors have continued their rally thanks to sharp upward revisions in profits. They are fully enjoying a favorable environment where demand is increasing and product prices are rising. Daejun Kim, a researcher at Korea Investment & Securities, said, "If steel and chemicals, which have established themselves as major export items, continue their strong performance in the April export-import trends announced at the beginning of the month, stock prices are likely to gain momentum for further rises despite short-term pressure from rapid price increases." He emphasized, "Therefore, it is essential to closely watch export performance."

The most notable event next week is undoubtedly the resumption of short selling. Based on past experience, short selling is indeed a factor that increases supply-demand uncertainty. However, it is currently limited to KOSPI 200 and KOSDAQ 150 stocks, and in the case of KOSPI, the earnings momentum of shortable stocks is strong, so it is expected that they will not be exposed to selling pressure in the short term.

Researcher Kim added, "Regarding the highly anticipated SKIET subscription, the refund date is the 3rd, and from that day onward, the inflow of funds into the stock market may increase, which is also expected to lead to a favorable outcome for the stock market."

This content was produced with the assistance of AI translation services.