Warning Signs for KOSPI Volatility... Semiconductor Earnings Seen as the Turning Point [Weekly Stock Market Outlook]

[Financial News] South Korea's stock market fell more than 7% in a week, hit by concerns over surging memory prices driven by artificial intelligence (AI) semiconductors and by interest rate pressures. This week, the market is expected to gauge its direction while closely watching Samsung Electronics' preliminary earnings release on the 7th of next month, along with South Korea's export data and U.S. employment figures.
According to the Korea Exchange on the 28th, the KOSPI closed last week, from the 22nd to the 26th, at 8,411.21, down 7.08% from the previous week. The KOSDAQ also fell more than 11% over the same period.
Semiconductors were at the center of the market's volatility. Samsung Electronics and SK hynix have been key stocks driving KOSPI gains, but after their sharp short-term rally, they became targets for foreign investors taking profits. Last week, foreigners sold large net amounts of Samsung Electronics and SK hynix. As the market has become increasingly dependent on supply and demand for major semiconductor stocks, analysts say negative developments in the sector have spread into broader index volatility.
Retail investors propped up the market. In the KOSPI Market, foreigners and institutions posted net sales of 16.6372 trillion won and 3.061 trillion won, respectively, while individual investors alone bought a net 19.1511 trillion won. As of the 25th, investor deposits stood at 126.9924 trillion won, keeping retail investors' buying capacity at a high level.
NH Investment & Securities set this week's expected KOSPI range at 8,400 to 9,500. It cited upward revisions to second-quarter earnings forecasts as a positive factor, while pointing to uncertainty over the Federal Reserve System's monetary policy and concerns about rate hikes as downside risks. In particular, after Micron reported strong earnings, expectations for Samsung Electronics and SK hynix's second-quarter results have risen, making the index's direction likely to depend heavily on semiconductor profit outlooks.
The key events to watch this week are South Korea's June trade data and the U.S. June employment report, both due early next month. NH Investment & Securities projected the consensus for South Korea's June export growth at 55.7% from a year earlier. It said export data could support market expectations, given the seasonal strength in semiconductor exports and the effect of more working days. U.S. labor data, including nonfarm payroll gains and the unemployment rate, are seen as crucial indicators for assessing the Fed's chances of further tightening.
Na Jeong-hwan, a research analyst at NH Investment & Securities, said, "Expanded volatility does not necessarily determine the market's direction." He added, "Stock prices eventually find their fair value even amid volatility, and that fair value is determined by earnings. That is why investors need to maintain an overweight strategy in sectors with high earnings visibility."
elikim@fnnews.com Kim Mi-hee Reporter