KOSPI in 'Cave' Phase…Oil, Big Tech in Focus

If it breaks out upwards from this range, an upward trend can be expected, but if it falls below, further downside potential should be considered.

This technical situation suggests that the market's direction will soon be determined, marking a critical timing. Future fluctuations in oil prices and interest rates, as well as major corporate earnings announcements, are expected to significantly influence the KOSPI's movement.

The key variable determining market interest rates is the stability of WTI crude oil prices. WTI crude oil is currently around $82, and it is crucial for further declines to stabilize.

If oil prices fall steadily, it can contribute to a decrease in the consumer price index, increasing the possibility of interest rate freezes or cuts. The fact that the Middle East situation is not escalating further can act as a positive factor for oil price stability.

The U.S. 10-year Treasury yield serves as a benchmark for mortgages and student loans, thus significantly influencing overall market sentiment. Recently, yields rose to 4.7% but have now fallen to the 4.6% range, stabilizing.

This interest rate stability, along with falling oil prices, acts as a major market driver. Nvidia's earnings announcement is also a crucial variable; if earnings are positive, it could boost the index, but if negative, a cautious approach is needed, it is stated.

Expert Noh Gwang-min emphasized, "Because oil prices are falling, this is stabilizing. Only this needs to stabilize. If only this stabilizes and Nvidia also reports good earnings, the index will gain momentum to rise again, but if the opposite happens, we'll have to be a bit careful."

Nvidia has frequently experienced sharp drops immediately after earnings announcements in the past. The pattern of a one-month correction period after earnings followed by a rebound has been repeated.

Therefore, rather than overly worrying about the earnings announcement itself, an analysis suggests that utilizing the one-month adjustment period after the announcement as an opportunity for low-price buying is an effective strategy. Even if an earnings shock occurs, it could be a buying opportunity from a long-term perspective.

Expert Noh Gwang-min said, "There's no need to worry too much about Nvidia's earnings announcement. After the earnings announcement, it kept falling for about a month. But then it rose again a month later, and that has been repeating."

It is pointed out that Nvidia is effectively acting as a central bank in the AI industry. This is because it uses a 'circular finance' model where it lends money, and that money is then used to purchase GPUs.

This structure hinders the diversification of the AI industry and deepens concentration on specific companies, potentially leading to risks. An analysis suggests that caution is needed regarding this concentration phenomenon for the healthy growth of the AI market.

expert Noh Gwang-min stressed, "The current situation is one of waiting and seeing. We need to wait for the day when Samsung Electronics makes a 10 million share bet."

Despite recording tens of trillions of won in operating profits, they are pouring funds into AI-related investments, leading to a shortage of actual cash balances.

This results in negative operating cash flow for big tech companies, and demand for proof of actual profitability may increase in the future. This situation is assessed as a potential risk that excessive AI investment could have on financial soundness.

expert Noh Gwang-min pointed out, "Hyundai Motor Group still hasn't gotten its act together, it seems, and they should know how much BYD is sweeping the world now."

Samsung Electronics and SK Hynix are simultaneously buying back their own shares, ensuring market downside rigidity. Samsung Electronics is conducting a 15 trillion won share buyback, and Hynix is also buying back shares.

While these large-scale share buybacks are effective in defending against stock price declines, they have limitations in driving a stock price breakout, according to analysis. The prevailing opinion is that substantial buying by foreign investors must accompany any serious rise in stock prices.

Expert Noh Gwang-min remarked, "If you take half of it, say 80 trillion, and they've already spent 40 trillion, they could still cancel another 3-4 trillion worth of treasury shares."

Until then, downside support from share buybacks is expected to be maintained.

However, after the share buybacks end, earnings announcements will emerge as a major market variable, and the stock price direction is predicted to be determined by them. Investors should watch the corporate earnings announcements concentrated in October to formulate market response strategies.

Currently, the market is supported on the downside by Samsung Electronics and Hynix's share buybacks, but the index is showing a limited box-range trend. In this situation, an analysis suggests that a trading strategy within the box range is effective until earnings announcements.

It is particularly important to confirm Samsung Electronics' provisional earnings, which will be announced in early October, and then respond accordingly. The current period is judged to be a time to wait for signals of large-scale buying by foreign investors for a full-fledged market upturn.

Expert Noh Gwang-min emphasized the importance of foreign buying, saying, "The current situation is simply one of waiting and seeing. We need to wait for the day when Samsung Electronics makes a 10 million share bet."

The current market situation makes it difficult to judge whether the index will break out after box-range trading. This is because it is challenging to predict a clear direction until the third-quarter earnings announcements.

Therefore, investors must confirm third-quarter earnings and then, based on those results, assess the market's breakout potential and formulate a corresponding strategy.

Samsung Electronics held 190 trillion won in cash and cash equivalents as of Q2, and SK Hynix also had 87 trillion won. Based on these vast cash assets and considering owner family stakes including Chairman Lee Jae-yong, dividend payments and treasury stock cancellation are possible.

In particular, an analysis suggests that treasury stock cancellation is more advantageous for enhancing shareholder value than cash dividends. For example, if 40 trillion won from a total asset of 80 trillion won were used for share buybacks, an additional 3-4 trillion won in treasury stock could also be canceled.

Expert Noh Gwang-min mentioned, "If you take half of it, say 80 trillion, and they've already spent 40 trillion, they could still cancel another 3-4 trillion worth of treasury shares."

Currently, Samsung Electronics and SK Hynix are defined as the core pillars of the market. It is analyzed that rotation to other stocks is only possible if these companies maintain downside rigidity.

Themed stocks such as nuclear power and construction are classified as rotation targets, not leading stocks. In other words, when market stability is secured around Samsung Electronics and Hynix, specific themed stocks show an upward trend.

Expert Noh Gwang-min emphasized a large-cap-centric rotation strategy, stating, "It's a rotation where you set Samsung Electronics as the pillar, like a stake, and then rotate other things around it."

Currently, foreign investors are perceived to have low interest in the Korean market. An analysis indicates an absence of aggressive buying by foreigners across all stocks.

In this absence of foreign investors, institutional investors, especially financial investment firms and ETF funds, are acting as a driving force for the rise of construction and nuclear power stocks. Aggressive capital inflow from institutions is cited as one of the important characteristics of the current market.

Expert Noh Gwang-min emphasized the importance of foreign buying, saying, "The current situation is simply one of waiting and seeing. We need to wait for the day when Samsung Electronics makes a 10 million share bet."

Within construction stocks, differentiated upward momentum is emerging for individual companies. Hyundai E&C and Daewoo E&C are seeing their stock prices rise primarily due to nuclear power-related issues.

In contrast, GS E&C, despite having issues related to the construction of an AI data center in Donghae, Gangwon Province, is sometimes called the 'isolated construction company' due to its relatively smaller rise compared to other construction companies. This shows that market evaluations differ based on the individual momentum each construction company possesses.

Looking at construction stock valuations based on PER (Price-to-Earnings Ratio), DL E&C shows the lowest level at 6 times, indicating it is relatively undervalued. Daewoo E&C is at 12 times, GS E&C at 19 times, and Hyundai E&C at 26 times.

In terms of momentum, Hyundai E&C is evaluated as the 'number one stock' in nuclear power-related fields and is showing strength. Institutional investors are concentrating their investments on Hyundai E&C and Daewoo E&C, with high expectations particularly for Hyundai E&C.

Expert Noh Gwang-min stressed, "The current situation is one of waiting and seeing. We need to wait for the day when Samsung Electronics makes a 10 million share bet."

Hyundai Motor recently settled its strike with a condition of 40 million won in performance bonuses. However, this high-cost structure is cited as one of the reasons institutional investors are selling Hyundai Motor stock.

Especially in contrast to BYD's expanding market share in the global EV market, institutions are negatively evaluating Hyundai Motor's strategy for high-end EVs (Genesis G90 EV). This reflects concerns about Hyundai Motor's weakening competitiveness amidst intensifying global EV market competition.

Expert Noh Gwang-min pointed out, "Hyundai Motor Group still hasn't gotten its act together, it seems, and they should know how much BYD is sweeping the world now."