KOSPI and KOSDAQ Close Slightly Higher; Strong Chip Exports Fail to Lift Market Out of 'Wait-and-See' Mode

On August 11, the KOSPI and KOSDAQ closed slightly higher. Intraday volatility was very large. This was because US stocks had weakened the previous day, the 10-year Treasury yield hit 4.7%, oil prices rose, and uncertainty over the Strait of Hormuz persisted. These factors pushed the Philadelphia Semiconductor Index lower in the US, which also affected the Korean market.

At the time, no one could clearly explain the cause, and Nasdaq futures had not suddenly risen either. The KOSPI, which had been falling more than 1% intraday, abruptly recovered, raising big questions among market participants.

Historically, similar moves have happened, and when excitement returned afterward, the market tended to be pressed again. Since the broader KOSPI index showed a similar pattern recently, speculation arose that this rise was driven by expectations around semiconductors.

Today, foreign investors net bought about 200 billion won, centered on large caps such as Samsung Electronics and SK hynix. In the futures market, they net bought 470 billion won, a positive signal. The fundamentals of Samsung Electronics and SK hynix have not changed much, but the KOSPI has risen relatively less than the KOSDAQ, and foreign buying flowed in while investors were fatigued. This can be read as a small, temporary rolling rotation.

Samsung Electronics rose as much as 5% intraday but closed up only 4%, failing to break above its 20-day moving average and showing resistance. Technically, it is still assessed as being rejected and sliding back below the 20-day line. By contrast, SK hynix recorded a bullish candle for the first time in six trading days, attempting a turnaround, but this was still not enough to give strong conviction about the entire semiconductor sector.

Semiconductor export data for August 1 to 10 was released and drew market attention for being solid. Memory chip export value was $8,008.17 million, up 280% year over year and up 1.5% month over month. This export strength is a positive signal, but stock prices already partly reflect these expectations, so whether it will serve as an additional upward momentum driver is uncertain.

Investor psychology among individual investors is having as large an impact on the market as chip industry fundamentals. Margin loan balances have declined, and many individual investors have lost confidence in stock investing. Based on communication, many are exhausted, with no visible sense that they can make a profit. Even as the KOSDAQ attempts a rebound, this psychological pullback is likely to lead to disappointment-driven selling.

For the trend to return tomorrow, volume needs to surge, but for now volume is not supporting it. In this situation, the short-term market flow and the importance of sector plays are emphasized more than individual stock fundamentals.

The afternoon market generally failed to find direction and showed a wait-and-see pattern. Activity was concentrated among short-term traders, while most investors, including long-term holders, were observed to be fatigued and irritated. This phenomenon shows the absence of a clear market direction and depressed investment sentiment.

In the past, when Samsung Electronics rose 5%, SK hynix would rise 7-8% more, showing that kind of volatility, but now SK hynix is being held down. This suggests the move is more a technical rebound in individual stocks than a strong upward momentum across the chip sector.

Among individual investors, especially recent entrants, concern is growing that SK hynix could retest its previous low. If SK hynix retests its prior low in the mid-1.3 million won range, the last stop-loss selling from investors who have been holding on could emerge. Such a situation would reduce investors' willingness to act and could lead to a broader market slump, so market participants hope this drawn-out pattern does not emerge. Of course, they hope this scenario does not come to pass, but if it does, it is expected to weigh negatively on investor sentiment.

BH is known as a foldable-related stock and recently has also drawn expectations related to robots. That the stock rebounded from near the bottom with strong volume despite a target price cut report is interpreted as its undervalued appeal drawing market attention. This move is an example of stocks that had fallen a lot recently showing relative strength.

This strategy can be read as an effort to manage risk in a highly uncertain market while securing undervalued quality assets at the same time. Accordingly, individual investors also need to refer to these institutional trading flows when building their own strategies.

Kumho Engineering & Construction hit the daily limit-up, and Namhwa Construction also reached the limit-up, showing a strong rebound in stocks that had received little market attention. This is interpreted as buying spreading to undervalued or neglected stocks within a particular sector.

The domestic market tends to pause ahead of rate-related events like this, so the market is likely to show a wait-and-see pattern tomorrow as well. Since the market's direction could be determined by the CPI result, investors need to maintain a wait-and-see stance and respond cautiously. The options expiry scheduled two days later is also a factor that could increase market volatility.

Because Micron was relatively quiet when other chip stocks were moving, it may have room to rebound while the market is in wait-and-see mode. Technically, its price is also analyzed as consolidating well, so expectations for a future rebound are forming.

Because the 20-day line bent down last time, investors are focused on it. A break above the 20-day line depends on foreign investors' buying, and today foreign investors' purchases of 200 billion won flowing into Samsung Electronics and SK hynix partly revived market sentiment. Accordingly, whether the KOSPI succeeds in testing the 20-day line is likely to depend on how foreign investors trade going forward.

While the KOSPI moves sideways, investors should take time to consider whether to reallocate toward KOSDAQ sectors with strong earnings. Such earnings-backed sectors could be investment destinations offering relatively stable returns even amid market uncertainty.

For example, if the US CPI comes in better than expected or oil prices stop rising, and macro indicators stabilize, the market would hold its current level or edge higher. If this is confirmed over a few days or a week, the market level would rise slightly, and sectors that have been oversold could rebound as before. Sectors such as shipbuilding and defense, which were strong until recently but fell today, could draw attention again.

In the current market, investors should focus on assets that have fallen and regain confidence in investing. Confidence comes from earning profits. Rather than expecting a 10% gain from Samsung Electronics and missing small gains, it is important to value small gains such as 3-5% and build experience through that kind of trading. Cautiously, the advice was that by steadily earning profits this way and disciplining oneself, investors can gradually strengthen their investment skills even in a difficult market.