[MarketING] KOSPI Gears Up for Full-Scale Rise Amid Risk Mitigation

KOSPI Continues 5-Day Rally
Samsung Electronics and SK Hynix Both Hit New Yearly Highs

The KOSPI has continued its upward trend for the fifth consecutive day. The easing of concerns over the U.S. debt ceiling and positive developments in the semiconductor sector have provided upward momentum. However, since foreign investment is concentrated only in semiconductors, the rise is expected to be gradual.

KOSPI Rises for 5 Days... Samsung Electronics and SK Hynix Hit New Highs

As of 10:25 a.m. on the 19th, the KOSPI was at 2,533.77, up 18.37 points (0.73%) from the previous day. The KOSDAQ rose 2.22 points (0.27%) to 838.11.

[Image source=Yonhap News]

Similar to the previous day, the possibility of a debt ceiling negotiation settlement is acting as a driving force for the rise, along with continued semiconductor-related positive news triggered by Nvidia. The U.S. stock market also closed higher for the same reasons. On the 18th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 0.34%, the S&P 500 increased 0.94%, and the Nasdaq rose 1.51% compared to the previous day.

Han Ji-young, a researcher at Kiwoom Securities, analyzed, "Despite the Federal Reserve (Fed) officials' hints at additional interest rate hikes and the news of the leading economic index declining for 13 consecutive months, the U.S. stock market closed higher, driven by expectations for next week's debt ceiling negotiations and strong performances in AI and semiconductor stocks such as Nvidia, Micron, and Netflix, as well as growth stocks."

House Speaker Kevin McCarthy stated on the 17th that there would be no default and reiterated at a press conference the previous day that a path to a debt ceiling agreement is visible, mentioning that a House vote could take place next week.

Positive news from Nvidia also continued. Nvidia, which provided upward momentum to semiconductor stocks by signing an AI-related partnership with ServiceNow the previous day, led the semiconductor sector's rise due to expectations for new product launches, upcoming earnings next week, and CEO Jensen Huang's comments on AI. CEO Jensen Huang mentioned that the development of the AI industry will accelerate infrastructure installations such as servers. Nvidia rose 4.97%, while AMD (4.03%), Broadcom (3.11%), Intel (2.81%), and Micron (4.08%) also showed strength, pushing the Philadelphia Semiconductor Index up 3.16%.

Seo Sang-young, a researcher at Mirae Asset Securities, analyzed, "The U.S. stock market's semiconductor sector showed strength, supported by Nvidia CEO Jensen Huang's positive remarks on the AI industry, which will have a favorable impact on the Korean stock market. In particular, the Philadelphia Semiconductor Index has been rising continuously, up 3.16%, and foreign investors are actively buying related stocks."

Accordingly, Samsung Electronics and SK Hynix both hit new highs during the trading session. Samsung Electronics traded at 68,000 KRW, up 2.72% from the previous day, reaching an intraday high of 68,200 KRW, a new yearly high. SK Hynix also rose 4.17%, reaching an intraday high of 97,700 KRW, setting a new high.

Market Secures Downside Rigidity

With the easing of U.S.-origin uncertainties, favorable foreign investment flows, and semiconductor strength, the KOSPI continues its upward trend, and the market's downside rigidity has been secured, suggesting the possibility of a sustained upward phase.

Jeong In-ji, a researcher at Yuanta Securities, said, "After breaking through last August's high in mid-April, the KOSPI underwent a correction but rebounded as the decline was limited at the 60-day moving average, securing downside rigidity. The recent rebound validates the upward trend line formed since the beginning of the year, with mid-term lows continuously rising, making it possible for the upward phase to continue."

Improving earnings forecasts also contribute to the market's downside rigidity. Na Jeong-hwan, a researcher at NH Investment & Securities, explained, "In the first quarter of this year, 46.7% of domestic companies recorded earnings surprises, and overall first-quarter corporate earnings were better than expected. The operating profit forecasts for this year based on the KOSPI are also being gradually revised upward, which will act as a factor increasing the market's downside rigidity."

However, since foreign investment is concentrated in semiconductors, the market's upward momentum is expected to proceed gradually. Kang Jae-hyun, a researcher at SK Securities, said, "With the easing of U.S. bank risks and debt ceiling negotiation risks that had pressured the market, and the semiconductor sector bottoming out, AI, and the strong rebound of the Nasdaq attracting foreign investment, the index can continue its rebound. However, since foreign investors are not strongly buying the entire domestic market except for semiconductors, a gradual rise is expected."

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