[Market ING] Kospi Approaching 2800, Market Focuses on Earnings Results

KOSPI Stagnates Around 2750 Level
Attention on Whether Earnings Will Provide Additional Momentum for Rise

This week (April 1-5), the stock market is expected to attempt to break through the 2800 level on the KOSPI. With the upward momentum weakening, market attention is likely to focus on whether the first-quarter earnings can serve as an additional driving force for further gains.

[Image source=Yonhap News]

Last week, the KOSPI fell by 0.07%, while the KOSDAQ rose by 0.17%. On the 26th, the KOSPI reached an intraday high of 2779.40, marking its highest level in two years and raising expectations for breaking through the 2800 level. However, it failed to maintain the upward trend and closed the week around the 2740 level.

Jinhyuk Kang, a researcher at Shinhan Investment Corp., said, "With the U.S. Good Friday holiday and the Personal Consumption Expenditures (PCE) price index announcement pending, the index showed no clear direction." However, he added that the market was relieved by the March Federal Open Market Committee (FOMC) results, and following Micron's earnings announcement, semiconductor investor sentiment improved. Samsung Electronics, SK Hynix, and Hanmi Semiconductor all hit 52-week highs, and foreign investors net purchased 1.7 trillion won in the KOSPI last week, with a net purchase of 2 trillion won in the three aforementioned stocks, indicating a concentration in semiconductor supply and demand.

There is an opinion that the KOSPI is stuck around the 2750 level due to weak momentum to break through the valuation turning point. Kyungmin Lee, a researcher at Daishin Securities, said, "The KOSPI has been fluctuating around the 2750 level for a week. Although bond yields have fallen compared to before the March FOMC, they remain around 4.2%. Due to the strong dollar and weak yen and yuan, the won-dollar exchange rate is approaching the 1350 level." He added, "Besides the unstable external investment environment, the 2750-2800 range is a valuation turning point that is holding back the KOSPI." He continued, "Unless there is a strong liquidity momentum to overcome valuation burdens, a level-down in bond yields leading to valuation expansion, or strong earnings improvement with a rising 12-month forward earnings per share (EPS) trend, it will be difficult for the KOSPI to break through and settle above 2800 in the short term."

While the KOSPI remains stagnant, the first-quarter earnings season is expected to begin next month on the 5th with Samsung Electronics' preliminary earnings announcement, shifting market attention gradually toward earnings. Younghwan Kim, a researcher at NH Investment & Securities, said, "The stock market's focus is gradually shifting from inflation and valuation to earnings." He added, "Positive expectations for the first-quarter earnings season are growing, led by a semiconductor earnings turnaround, which could act as a driving force for the stock market's rise. Since the main earnings announcements will be concentrated in the 3rd and 4th weeks of April following Samsung Electronics' preliminary results, market expectations are likely to gradually increase over the upcoming order period." NH Investment & Securities has set the expected KOSPI band for this week at 2690-2810.

Researcher Kang said, "With expectations for Samsung Electronics' Device Solutions (DS) division to return to profitability and continued strength in large semiconductor stocks, we need to watch whether the index can rise further." He added, "Concerns about inflation have somewhat eased since the March FOMC, and valuation gains have paused after the dividend season. Therefore, attention is needed not only on leading stocks such as AI and semiconductors but also on sectors and stocks with earnings improvements."

Key events this week include South Korea's March export-import trends, China's March Caixin Manufacturing Purchasing Managers' Index (PMI), and the U.S. March Institute for Supply Management (ISM) Manufacturing on April 1; South Korea's March consumer price index and U.S. February factory orders on April 2; China's March Caixin Services PMI, U.S. March ADP private employment, and U.S. March ISM Non-Manufacturing on April 3; and the U.S. March employment report on April 5.

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