[Market ING] After Big Cut... Focus on 'Value-Up Index and Micron' Earnings

KOSPI Expected Range, 2520~2670
Semiconductors Are Again a Variable

This week, the domestic stock market trend is expected to be determined by Micron Technology's earnings announcement and the 'KRX Korea Value-Up Index.' Securities firms have projected the KOSPI range for this week to be between 2520 and 2670 points.

Due to the impact of the US stock market reaching all-time highs in the Dow and S&P 500 within a day, the KOSPI index opened at 2,603.83, up 23.03 points (0.89%) from the previous trading day, and the won/dollar exchange rate started at 1,327.6 won, down 1.4 won. Dealers are working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul on the 20th. Photo by Jo Yongjun jun21@

According to the Korea Exchange on the 22nd, last week the KOSPI closed at 2593.37, up 17.96 points (0.70%) from the previous week. Despite the U.S. Federal Reserve's big cut (a 0.5 percentage point reduction in the benchmark interest rate), the market response was lukewarm due to concerns about the U.S. economic slowdown. During the same period, the KOSDAQ index closed at 748.33, up 15.13 points (2.06%).

Moreover, after Morgan Stanley released a report lowering SK Hynix's target price by more than 50%, Samsung Electronics and SK Hynix declined, pulling down the domestic stock market. Samsung Electronics and SK Hynix are the first and second largest listed companies by market capitalization in Korea. The domestic index is inevitably heavily influenced by the stock movements of these semiconductor leaders.

This week’s market is also expected to be shaped by semiconductors. On the 25th (local time), Micron, the world's third-largest memory semiconductor company based in the U.S., will release its fiscal year 4th quarter (June to August) earnings.

Kim Young-hwan, a researcher at NH Investment & Securities, said, "Following Morgan Stanley's recent downgrade report on Korean semiconductor investments, there is growing sentiment to verify the actual impact of decreased smartphone and PC demand on earnings and the possibility of oversupply in high-bandwidth memory (HBM)." He added, "Micron's earnings announcement will serve as a 'weather vane' for the semiconductor industry outlook."

Attention should also be paid to U.S. economic indicators. On the 26th and 27th, the final figures for the U.S. 2nd quarter GDP and the August Personal Consumption Expenditures (PCE) price index will be released. Lee Kyung-min, a researcher at Daishin Securities, stated, "If economic indicators such as the PCE price index and manufacturing and services PMI confirm that the economic situation is not worse than investors’ concerns, the stock market will show a rapid recovery."

Additionally, speeches by U.S. Federal Reserve officials scheduled for the 23rd (local time) are events closely watched by the market. These speeches may reveal the hawkish members' (those favoring monetary tightening) true stance on the big cut, potentially alleviating concerns about a U.S. recession. Researcher Kim Young-hwan said, "Many Fed officials are scheduled to speak this week, and through these speeches, we can understand the background behind hawkish members agreeing to the big cut," adding, "This is expected to maintain a positive momentum in the stock market."

Domestically, the release of the Value-Up Index is the most notable event. The Korea Exchange plans to unveil the 'KRX Korea Value-Up Index' on the 24th. It is being watched to see whether Value-Up related stocks will inject vitality into the domestic market, which currently lacks leading stocks.

Kang Jin-hyuk, a researcher at Shinhan Investment Corp., said, "Although semiconductor stocks continue to weaken, financial stocks (banks, securities, insurance) are showing strong relative returns supported by corporate value enhancement disclosures and anticipation of the Value-Up Index launch." He added, "Attention should be paid to whether the Value-Up Index can unblock the bottleneck in the KOSPI, which has limited upside due to semiconductor stock weakness, based on the announcement details."

Meanwhile, NH Investment & Securities has projected the KOSPI range for this week to be between 2520 and 2670 points.

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