Lack of Trading Volume, Will It Hold Back Index Growth?

Customer deposits, which had been decreasing since July, recently recovered above the 100 trillion won level. However, this is still a reduced level compared to the period when they were significantly increasing.

The KOSPI index and the flow of customer deposits show a similar synchronized movement. As deposits stagnate, the index also fails to gain upward momentum.

This contrasts with past instances where trading volume broke through resistance during index rallies.

Analysis suggests that current trading volume is insufficient to push the index decisively above the 7,000 level. A strong breakthrough in trading volume is necessary for the index to rise.

The fact that investor sentiment has weakened compared to the first half of the year is also confirmed at corporate seminars. Some investors are already stuck after entering at high points.

Due to this psychological contraction and trapped capital, it is difficult for trading volume itself to circulate actively. For the index to recover, trapped capital needs to break even or new capital inflow is required.

The strategy of creating a cash buffer through monetization during a market rebound has been advised for the past month. This is in preparation for a stock price rebound when interest rates are not falling.

It is advisable to prepare for major events such as FOMC meetings and midterm elections, and to maintain a cash-holding strategy until a clear breakthrough in the market is visible.

For individual investors, too many uncertainties persist.

It seems that at least one of these uncertainties needs to be resolved to decisively break through the 7,000 and 8,000 lines. However, such a scenario is not clearly visible at present.

When prices rise, companies that can successfully pass on these costs to product prices survive.

Conversely, companies that cannot pass on costs will continuously see their margins erode or incur losses. In a high-interest rate environment where capital costs increase, companies without profit growth may be deprioritized for investment.

When interest rates rise, even with the same performance, a discounting factor occurs, leading to a lower valuation of stock value.

In a high-interest rate environment, the expected return of high PER (Price-to-Earnings Ratio) stocks decreases. Rising long-term interest rates tend to lead to a decrease in the overall market PER.

Just as footballer Lee Kang-in's evaluation varies depending on the market environment, the value of a company can also be evaluated differently according to market conditions. Even Samsung Electronics' operating profit of 100 trillion won changes in value depending on interest rate levels.

When interest rates begin to fall, Korea's semiconductor sector is expected to receive a favorable re-evaluation. Until then, we have the task of enduring well.

Samsung SDI's stock price showed strength as its Q3 earnings forecast was revised upwards. In contrast, Samsung Electronics and SK Hynix have seen no change in their earnings estimates since Q2.

The problem is that while these companies have high absolute profit amounts, their profit growth trajectory, or momentum, has currently stalled. Simply being undervalued is not a sufficient condition for stock price appreciation.

Concerns about exchange rate volatility and the speed of the depreciation trend persist. For stock prices to rise, the trajectory of Q4 and next year's earnings forecasts needs to show at least a slight turnaround.

The existing low PER valuation argument is already reflected in the market, requiring a new catalyst. Currently, the downside is somewhat limited.

However, if oil price instability continues, doubts about AI semiconductor investment may increase.

Ultimately, the analysis suggests that stability in oil prices and interest rates is a prerequisite for upward revisions in semiconductor earnings forecasts. Stable stock market trends can be expected only when the macro environment improves rapidly.

In this process, there is a high possibility that the tone of forecasts for each sector will be adjusted.

If earnings are poor, it will be difficult to set high forecasts for next year. Therefore, Q3 earnings announcements will be important data for gauging future market trends and leading sectors.

This is judged based on year-over-year (YoY) growth rates.

The semiconductor sector is expected to show stronger operating profit growth than sales from 2024. The shipbuilding sector has a history of becoming a leading stock with improved operating profit since 2022.

Therefore, it is crucial to select sectors that meet these growth conditions based on forecasts from 2026 onwards.

Recently, a rapid sector rotation has been observed, where the lifespan of leading stocks is short. In such an environment, sectors with catalysts still tend to react and show an upward trend.

During periods of price and oil price instability, it is necessary to pay attention to the defensive strength of inflation-hedging sectors. Based on past cases since the 1970s, interest in drilling and energy development-related stocks is warranted.