[MarketING] Kospi Rises on Strong Micron Earnings... Samsung Electronics Hits New High

KOSPI Turns Up After 3 Days
Samsung Electronics Hits New 52-Week High Intraday

The KOSPI rebounded after three days. This appears to be due to improved investor sentiment following strong earnings from Micron. As a result, Samsung Electronics hit a 52-week high during trading. However, the gains were limited due to tightening concerns stemming from additional interest rate hike remarks by Jerome Powell, Chair of the U.S. Federal Reserve (Fed). It is expected that volatility driven by Fed policy uncertainty will frequently occur until the July Federal Open Market Committee (FOMC) meeting.

KOSPI Rebounds After Three Days

As of 10:15 a.m. on the 29th, the KOSPI was up 11.24 points (0.44%) from the previous day, standing at 2,575.43. The KOSDAQ rose 1.14 points (0.13%) to 868.11.

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Although the U.S. stock market closed mixed the previous day, the domestic market is showing an upward trend, supported by strong earnings from Micron announced after the market close. On the 8th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell 0.22%, the S&P 500 dropped 0.04%, while the Nasdaq rose 0.27% compared to the previous day.

Han Ji-young, a researcher at Kiwoom Securities, explained, "The U.S. stock market showed mixed results as it digested additional tightening remarks from central bank governors at the European Central Bank (ECB) forum and news of the U.S. considering additional export bans on AI semiconductors to China."

At the ECB forum, Chair Powell maintained his previous stance that interest rates will be raised at least twice this year, increasing the possibility of consecutive rate hikes. He mentioned the still strong economic growth rate, labor market, and inflation from the last quarter, stating, "Monetary policy is restrictive but may not be sufficiently restrictive," and added, "We will not exclude the option of moving rates at consecutive (FOMC) meetings." Christine Lagarde, President of the ECB, also emphasized that the possibility of halting rate hikes is not being considered. Andrew Bailey, Governor of the Bank of England (BOE), indicated that additional rate hikes would be inevitable if inflationary pressures persist.

Seo Sang-young, a researcher at Mirae Asset Securities, analyzed, "Powell and other central bank governors mentioned that they will continue to fight inflation until there is evidence of success, indicating they will not back down from tightening policies. However, Powell expressed confidence in the economy by stating the possibility of a recession is low, which had a positive impact on the stock market."

Price volatility due to Fed policy uncertainty is expected to frequently occur for the time being. One researcher said, "Both the ECB and BOE have indicated they will continue hawkish (monetary tightening-preferred) policies over a longer time horizon than the Fed, which could create pressure on the Fed not to prematurely halt tightening." He added, "Until the July FOMC, the market will continue to face Fed policy uncertainty and be exposed to frequent price volatility." He further noted, "At this point, the optimal strategy is to respond by monitoring economic indicators rather than reacting sensitively to statements or news flow from central bank officials."

Samsung Electronics Hits 52-Week High on Strong Micron Earnings

U.S. semiconductor company Micron reported quarterly earnings that exceeded market expectations, leading Samsung Electronics to hit a 52-week high during trading.

Samsung Electronics is trading at 73,000 KRW, up 0.41% from the previous day. During trading, it rose to 73,400 KRW, setting a new 52-week high.

One researcher said, "Micron's strong quarterly earnings and the upward revision of guidance due to robust AI demand, which is reflected in after-hours trading gains, are likely to improve investor sentiment toward domestic semiconductor stocks."

On the 28th (local time), Micron announced that its revenue for the third quarter of fiscal year 2023 (March-May) was $3.75 billion, down 50.7% year-on-year. It posted a net loss of $1.896 billion and a loss per share of $1.43, turning to a deficit. Both quarterly revenue and loss per share exceeded analysts' estimates (revenue of $3.69 billion, loss per share of $1.59). Micron forecasted that its revenue for the fourth quarter of fiscal year 2023 (June-August) would be $3.9 billion.

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