[MarketING] Earnings Standing Out in a Correction Market

KOSPI and KOSDAQ Close Lower for Fifth Consecutive Day
SK Hynix Rises Over 2% on Earnings Relief

The KOSPI and KOSDAQ continued their decline for the fifth consecutive day. Amid market concerns over an economic recession, supply-demand instability, and cautious sentiment ahead of the May U.S. Federal Open Market Committee (FOMC) meeting scheduled for next week, a clear trend of stock price movements driven by corporate earnings has emerged.

KOSPI Falls for 5 Consecutive Days... Closes Near Flat

On the 26th, the KOSPI closed at 2,484.83, down 4.19 points (0.17%) from the previous day. The KOSDAQ ended the session at 830.44, down 8.27 points (0.99%).

[Image source=Yonhap News]

Foreign selling pressure continued to pull the indices down. Although there was a rebound buying from individual investors following the sharp decline the previous day, it was insufficient to defend the indices. On this day, foreigners sold 98.5 billion KRW in the KOSPI market and 150 billion KRW in the KOSDAQ market. Notably, foreigners have been selling in the KOSDAQ market for eight consecutive trading days. The recent larger decline in the KOSDAQ compared to the KOSPI appears to be due to this foreign selling influence. Individuals net bought 221.8 billion KRW in the KOSPI market and 142.5 billion KRW in the KOSDAQ market. Particularly in the KOSDAQ market, individuals have net bought for eight consecutive trading days, opposite to foreigners.

With the continued weakness of the Korean won, foreigners seem to be realizing profits continuously. In the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,336.3 won, up 4.1 won from the previous day. During the session, it briefly rose to the 1,340 won level for the first time in about five months since November last year. This was influenced by renewed concerns over U.S. bank risks, which stimulated risk-averse sentiment.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "While individuals were the sole net buyers, individual themes showed strength amid the weak index." He added, "Themes related to Microsoft and Alphabet showed strength due to strong earnings and positive outlooks on artificial intelligence (AI), and entertainment stocks also led gains on expectations of strong first-quarter earnings."

On this day, SM Entertainment rose 4.84%, YG Entertainment 4.62%, JYP Entertainment (JYP Ent.) 2.21%, and HYBE 1.73%. Lee Hyun-ji, a researcher at Eugene Investment & Securities, commented on entertainment stocks, saying, "Despite limited activities by major artists in the first quarter, considering one-time expenses, the results are expected to be generally solid," and "From the second quarter, as major artists' activities ramp up, all four major entertainment companies are expected to continue improving profits."

SK Hynix Rises Over 2% on Earnings Relief... LG Energy Solution Also Gains on Strong Results

Major companies continued to announce their first-quarter earnings, and stock prices responded accordingly.

SK Hynix announced before the market opened that it recorded an operating loss of 3.4023 trillion KRW on a consolidated basis in the first quarter of this year, turning to a loss compared to the same period last year. SK Hynix posted an operating loss of 1.8984 trillion KRW in the fourth quarter of last year, marking two consecutive quarters of losses. However, the stock price rose over 2%. SK Hynix closed at 87,400 KRW, up 2.22% from the previous day. This was interpreted as relief that the operating loss was better than expected and reflected expectations of industry recovery from the second quarter onward. According to financial information provider FnGuide, the consensus operating profit forecast for SK Hynix in the first quarter was a loss of 3.6645 trillion KRW. Hwang Min-sung, a researcher at Samsung Securities, said, "The 3.4 trillion KRW loss was better than the market's feared 5 trillion or 6 trillion KRW loss," adding, "Industry production cuts are larger and more widespread than expected, which will accelerate inventory depletion."

Do Hyun-woo, a researcher at NH Investment & Securities, said, "SK Hynix's first-quarter results were better than expected," and "The memory market is expected to improve somewhat in the second quarter, with prices rising from the second half."

LG Energy Solution also saw its stock price rise over 2% on strong earnings, gaining 2.90%. LG Energy Solution announced that its consolidated operating profit for the first quarter of this year was 633.2 billion KRW, an increase of 144.6% compared to the same period last year.

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