[MarketING] Semiconductor Regains Leadership... Samsung Electronics Hits New High for Two Consecutive Days

KOSPI Rises in One Day
Semiconductor Index Leads Rebound

The KOSPI rebounded after a day. The semiconductor sector, the market leader, continues its strong performance, driving the index higher. For other sectors to gain momentum, confidence in economic recovery seems necessary, so it is expected that the semiconductor dominance will likely continue until export indicators improve.

KOSPI Turns Up After a Day... Semiconductor 'Hard Carry'

As of 10:15 AM on the 26th, the KOSPI was at 2,564.52, up 9.83 points (0.38%) from the previous day. The KOSDAQ rose 3.65 points (0.43%) to 851.37.

[Image source=Yonhap News]

The semiconductor sector is driving the index higher as it continues to perform strongly, boosted by Nvidia's strong earnings. Samsung Electronics traded at 70,300 KRW, up 2.18% from the previous day, regaining the 70,000 KRW level. During the session, it rose to 70,400 KRW, setting a new 52-week high for the second consecutive day. SK Hynix is up 4.15%.

The U.S. stock market closed mixed amid uncertainties such as debt ceiling negotiations and tightening concerns, but related stocks surged on Nvidia's strong earnings, pushing the Nasdaq up more than 1%. On the 25th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell 0.11% from the previous day, while the S&P 500 rose 0.88% and the Nasdaq rose 1.71%. Ji-hyun Kim, a researcher at Kiwoom Securities, explained, "Despite concerns over a potential downgrade of the U.S. credit rating by Fitch and news of a technical recession in Germany, the U.S. stock market closed mixed, supported by a sharp rise in AI-related stocks following Nvidia's earnings surprise."

Nvidia surged after reporting an earnings surprise in Q1 and providing positive guidance for Q2, driven by strong performance in its core business areas such as data centers amid robust AI demand. Nvidia rose 24.37%, AMD 11.2%, and Micron 4.6%, with other AI-related semiconductor stocks also rising. Consequently, the Philadelphia Semiconductor Index jumped 6.81%.

Sang-young Seo, a researcher at Mirae Asset Securities, said, "Nvidia's revenue decreased 13% year-over-year but improved 19% quarter-over-quarter, showing the awaited recovery of chip manufacturers. Especially, the announcement that data center demand from the AI industry will remain strong and that supply volume will be significantly increased in the second half caused the sharp rise. The market judged that the AI industry is progressing faster than expected and is already directly impacting corporate sales, leading to active buying mainly in related stocks."

Semiconductors Regain Market Leadership

At the beginning of the year, secondary batteries led the index gains, and now semiconductors are taking over the baton, regaining leadership.

Daeseok Kang, a researcher at Yuanta Securities, said, "As of the previous day, the KOSPI recorded a 2.1% monthly gain, and despite the deteriorating market environment and rising pessimism near the end of May, it is highly likely to record a three-month consecutive rise. The semiconductor sector, which is the largest by market capitalization in the domestic market, contributed nearly 80% of the overall market's gains, meaning that thanks to semiconductors, the concern of 'Sell in May' was overcome."

The semiconductor dominance is expected to continue for the time being. Yujun Choi, a researcher at Shinhan Investment Corp., explained, "At the beginning of the year, the emergence of 'Chat GPT' and currently the expansion of AI investment are driving the price synchronization of semiconductor sectors in major countries. When combined with global trends, the dominance of leading stocks expands and their effective period can be extended."

While semiconductors are showing strength following secondary batteries at the start of the year, other sectors are being left behind, showing a temperature gap. The KOSPI has risen 15% since the beginning of the year, but excluding semiconductors and secondary batteries, it has only risen about 4%. Researcher Choi said, "The price-to-earnings ratio (PER) excluding these two sectors is 8.8 times, about 3.8 times lower than the KOSPI, and has been hovering around 9 times since the beginning of the year. This is partly because semiconductors and secondary batteries have been strong, but ultimately, if confidence in economic recovery continues and the index rises, warmth could spread to other sectors. However, until export indicators improve, semiconductor dominance is likely to continue."

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