Samsung Electronics & SK Hynix Recover Previous Highs… What’s the KOSPI’s Next Scenario?

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At the market open, Samsung Electronics and SK Hynix remained flat, showing no particular movement. However, nuclear power-related stocks surged on news that the government's investment project in the U.S. would include the construction of nuclear power plants within the US military. This news was anticipated to be announced on the 18th, leading to its emergence as an issue yesterday, though the government later refuted it.

This was a clarification regarding previous reports about a nuclear power plant construction project, requesting cautious reporting as matters are currently under discussion with the U.S. However, the securities industry interprets this as the government already coordinating the project, assuming it will be announced in September.

Recently, oil stocks have been highlighted due to geopolitical risks. It is analyzed that the Ukraine-Russia war and attacks on refinery facilities in the Iran region, rather than refining margins, are having a greater impact on oil stocks, along with rising oil prices. This instability in international affairs is driving gains in related sectors across global markets, including the United States, and Korean oil companies are showing a competitive edge in this situation.

Currently, with the exchange rate at ₩1,344 and a stronger won, export stocks are seeing mixed fortunes. Specifically, some export stocks, such as food and beverage and cosmetics, recorded a decline yesterday due to the strong won. In contrast, companies with monopolistic positions or strong competitiveness tend to be less affected by exchange rate fluctuations, showing a differentiated trend.

The US Energy Secretary mentioned that an Iran nuclear deal might be difficult to achieve for some time, leading to continued instability in the Middle East. Against this backdrop, international oil prices are maintaining above $90, which raises concerns about increased interest rate pressure due to high oil prices and greater market burden. The situation in the Middle East has a significant impact on the global economy and financial markets, requiring continuous attention.

KOSPI has recorded a relatively larger decline compared to major global stock markets. While showing a similar trend to the Taiwan stock market, it has fallen more than other developed market indices such as the S&P 500, NASDAQ, and Nikkei 225. In contrast, other markets like Europe are maintaining a solid trend. This suggests that KOSPI's sluggish performance is due to specific internal factors rather than a general global market issue.

The reason the European market maintains a robust trend despite political issues is largely due to the strong support from global liquidity. Based on this immense power of liquidity, movements in individual countries and sectors emerge, and our market also exists within this global trend. The analysis suggests that the Korean market is not an isolated island but is organically connected to global capital flows.

Samsung Electronics rose 6% and SK Hynix 8%, reaching their target prices. This stems from the perception that domestic semiconductor stocks were undervalued compared to the global market, suggesting that the underperformance of Korean semiconductor stocks is due to internal issues. Nevertheless, the outlook remains positive for further gains in semiconductor stocks.

Yesterday, foreign investors recorded a massive net selling of ₩8.7 trillion, a record-breaking volume, the third highest ever, capable of significantly impacting the market. However, even amidst this large-scale selling, specific sectors such as nuclear power, combined power generation, transformers, and cables, related to the announcement of US investment, showed strength, demonstrating the market's resilience.

A rise in stock prices provides an important opportunity for investors who bought at highs to exit the market without losses, or with minimal gains. However, such a price increase can also act as a potential selling pressure. The phenomenon of ownership changing hands, driven by buying from institutions and foreign investors, can be interpreted as a positive signal for the market as it digests this supply.

From a technical analysis perspective, this should be considered a positive signal. In contrast, KOSDAQ still lacks clear signals of buying power on its chart, showing a different trend from KOSPI.

Opinions are sharply divided among Fed members regarding a rate freeze versus a rate hike. The market is expected to react strongly to the Fed's rate decision and the tone of accompanying statements. Experts warn that hawkish remarks after a rate freeze could have a more negative impact on the market, as they might heighten concerns about long-term interest rate increases and cause market instability. Conversely, dovish remarks after a rate hike could be a positive signal for the market.

In a situation where the market's reaction to an interest rate hike is uncertain, investors should consider securing cash for risk management. Because it is difficult to predict how the market will react after a rate hike, a strategy of flexibly approaching short-term trading, rather than long-term investment, until market conditions are confirmed, is emphasized. This indicates a cautious approach to dealing with volatility during uncertain times.

This manifests as experts spending more time analyzing individual stocks rather than overall market trends. It is important to formulate investment strategies by considering how analysts' statements change depending on whether the market is good or bad. Currently, individual stocks are showing strong performance.

This serves as a critical inflection point that can defend against a short-term index decline. Based on the current upward momentum, KOSPI appears to have started a challenge toward the 7,500-point level depending on next week's market trend. Therefore, next week's market movement is expected to be a crucial turning point in determining the future direction of the index.