"No Leading Stocks, No Supply-Demand, No Direction: A 3-No Market... Need for Stock-Centered Response"

Second Battery Material Stocks Expected to Remain Strong

On the 16th, the KOSPI, KOSDAQ, and KRW-USD exchange rate are displayed in the dealing room of Hana Bank's headquarters in Jung-gu, Seoul. [Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] The KOSPI has been hovering around the 3200 level since the beginning of this month. Analysts describe this as a 'three-no (3無) market' with no leading stocks, no dominant market participants, and no clear direction. There is advice that it is necessary to respond with individual stocks rather than the index.

According to the Korea Exchange on the 18th, the KOSPI has been trapped in a 'box range' oscillating around the 3200 level this month. It rose intraday to 3313.51 on the 6th but then fell for three consecutive trading days, dropping to as low as 3188.80 at one point. Although it has somewhat recovered, it has mostly remained in the 3200 range this month. This contrasts with last month, when it rose 2.90% over the month and broke through 3300. This is the first month this year to record a decline on a monthly basis.

Samsung Securities described this as a 'three-no market.' They analyzed that there is no clear market leader, no special dominant market participant, and no definite direction. This is explained as a combined effect of ▲ the strength of the US dollar and doubts about the sustainability of second-half earnings ▲ the burden of IPOs of subsidiaries of growth stocks such as Kakao, LG Chem, and SK Innovation ▲ and investors' cautious stance ahead of large IPOs in the second half.

However, domestic companies' earnings are still on track. The estimated combined operating profit for KOSPI companies this year is around 224 trillion won, about a 20% increase compared to the beginning of the year. However, some sectors such as semiconductors and chemicals are showing sluggish stock performance due to concerns about the market environment in the second half. Large secondary battery stocks are experiencing a sluggish trend due to concerns over large-scale investments, spin-offs, and subsidiary IPOs. This is also analyzed as the reason why small and mid-sized secondary battery material companies have recently shown relatively strong performance.

In this situation, there is advice to respond with individual stocks rather than the index. Shin Seung-jin, a researcher at Samsung Securities, said, "In growth stocks, it is better to focus on automotive secondary batteries and materials, electric components, and beneficiaries of economic recovery (reopening)." He added, "This week, we increased the weighting of secondary battery material stocks and included Lotte Fine Chemical, which is expected to expand its eco-friendly business, and LG Innotek, which is expected to have momentum from new product launches by customers and expanded electric component sales in the second half, in our weekly recommended stocks."

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