"Achieved 3,000 Points and 80,000 Electronics... Year-End Volatility Expected to Persist"

Trend Reversal Judgment Is Premature... US Stock Market Still in Volatile Phase
"Memory Semiconductor Sector Rebound Should Be Seen as a Bear Market Rally"

On the afternoon of the 24th, officials are working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. [Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] Samsung Electronics rose above 80,000 won after about four months, pushing the KOSPI back above 3,000, but analysts say it is too early to be reassured. This is because the rebound in DRAM prices is unlikely to continue, limiting the semiconductor sector's stock price recovery, and the recent strength in the U.S. stock market is also being constrained.

On the 25th, Mirae Asset Securities forecast that the year-end volatility market would persist due to these factors. The previous day, Samsung Electronics, the largest company by market capitalization in Korea, closed at 80,500 won, up 0.75% from the previous day. This marked the first time in about four months since August 10 that the closing price surpassed 80,000 won. It has risen 12.9% just this month. SK Hynix, ranked second in market capitalization, also closed at 128,000 won, marking its highest closing price since June 16. Thanks to the semiconductor sector's strength, the KOSPI closed slightly higher at 3,012.43, breaking above 3,000 again after a week.

However, it is analyzed that it is difficult to view this as a complete trend reversal. First, it is hard to interpret the Chinese economy, which heavily depends on domestic companies, as being in a full rebound trend. Earlier, China, where inflation control is well managed, made slight adjustments toward easing monetary policy. On the 20th, the People's Bank of China lowered the one-year Loan Prime Rate (LPR), the benchmark interest rate, from 3.85% to 3.80% for the first time in 20 months. On the 6th, it also cut the reserve requirement ratio (RRR) by 0.5 percentage points, injecting 1.2 trillion yuan (approximately 223 trillion won) into the market.

This is somewhat different from the emerging trend of advanced countries beginning to tighten monetary policies following changes in inflation perceptions. Hee-chan Park, a researcher at Mirae Asset Securities, explained, "Considering the policy intensity, this can be interpreted as a defensive measure to mitigate negative ripple effects such as real estate contraction," adding, "It is difficult to interpret this as a change that would justify expecting a rebound in the Chinese economy."

The change in the semiconductor stock market atmosphere is also noteworthy. While memory companies such as U.S.-based Micron Technology and Korea's SK Hynix are on the rise, semiconductor design companies (fabless) like Nvidia, whose stock price doubled this year, are reacting sensitively to the acceleration of monetary tightening, leading to profit-taking sales. Researcher Park diagnosed, "Considering the downturn in the OECD leading economic index, it is difficult to expect a sustained rebound in DRAM prices, so the memory semiconductor stock price recovery should be approached as a bear market rally (a temporary rebound during a downtrend)."

Over the past two months, the U.S. stock market has also seen limited further gains and ongoing volatility. There is no significant momentum expected for the next week (December 27?31). Researcher Park advised, "Since some Santa rally has occurred, market volatility may persist, so stable asset management efforts are necessary," adding, "Meanwhile, despite the RRR and interest rate cuts, China's December Purchasing Managers' Index (PMI) is expected to decline compared to the previous month."

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