Foreign buying pushes KOSPI past 7,000… outlook points to 7,500

CEO Lee Kwon-hee pointed to the liquidity limits of the domestic market and expressed concern about extending trading hours. He noted that under current conditions, where there is no increase in foreign capital liquidity, longer trading hours would raise turnover, which could trigger sharp swings and cause major disruption, especially in small and mid-cap KOSDAQ stocks and thematic shares.

He stressed that unless foreign capital liquidity increases, for example through inclusion in the MSCI developed market index, extending trading hours with the current limited liquidity would intensify speculation in the market.

CEO Lee warned that extending trading hours would create a market dominated by short-term trading. Securities firms may see higher commission income, but the market itself would see more active day trading and higher turnover, disrupting price continuity and possibly causing extreme volatility within a single day.

He expects this to be especially pronounced in small and mid-cap stocks and said it would have a negative impact on building a healthy investment environment.

His message is that blindly copying without considering Korea's unique characteristics could produce adverse side effects.

CEO Lee stressed that a genuine rise in stock prices must be preceded by accumulation by major investors. Citing the past example of Pharmaresearch, he said the ideal pattern is a rise after a specific group accumulates shares, and that a sustained uptrend is hard to maintain with individual investors alone.

This suggests that meaningful trend reversals and gains require inflows of large capital, such as institutional or foreign investors.

He explained that these can be targeted when they attempt to rebound from bottom levels, and that investors can aim for a short-term rally up to the 60-day or 120-day moving average without greed.

This means that stocks that have fallen excessively may offer profit opportunities through technical rebounds. Investors can look for entry points by carefully analyzing these stocks' chart patterns.

He analyzed that companies such as Shinsegae and Hyundai Department Store, which have strong earnings but whose share prices have fallen sharply recently, could show a strong rebound.

This suggests that holiday demand, combined with improving consumer sentiment, could have a positive effect on the share prices of related companies.

Investors in consumer goods tend to move capital within the sector.

This shows that when the rally in one consumer-goods sector slows, investors may take profits and shift funds to other promising consumer sectors.

He analyzed that there is little overhead supply up to the 1.6 million won range, which is why it could rise easily, and that after a brief pause in this zone it may move to the next resistance level.

CEO Lee assessed that LG Innotek is attempting a trend reversal, which he views as a positive signal. He cited the fact that the 5-day moving average broke above the 21-period level and that trading began above the 120-day moving average.

Changes in these technical indicators suggest that LG Innotek's share price may move out of its downtrend and into an uptrend.

This means LG Innotek, which is showing signs of a trend reversal, could see a large short-term gain. Investors may plan their strategies with this near-term upside target in mind.

Producer Kim Young-min said a theme around SMRs (small modular reactors) is forming following Bill Gates' visit to Korea. He noted that Doosan Enerbility's 4% gain was also tied to Gates' visit, and that news of his meetings with the HD Hyundai group and SK Chairman Chey Tae-won could lead related stocks to strengthen.

This shows that Gates' activities are raising expectations for domestic SMR-related companies and becoming a factor that triggers thematic share-price movements.

Like Kia's recent Investor Day, Hyundai Motor is expected to present the status of its robot learning efforts, which is anticipated to have a positive effect on its share price.

This suggests Hyundai Motor is actively investing in and developing robotics, a core area of future mobility technology, and that the event will be an important catalyst that raises market expectations.

He based this on the fact that its PBR (price-to-book ratio) currently sits below 1x, at around 0.97 or 0.95.

This suggests Hyundai Motor's share price is undervalued relative to its earnings and asset value, and that there is ample room for it to rise through a re-rating of the company's value.

He explained that blog articles such as those on the 'Im Su-yeol fraud case' can be misleading in their headlines even though the underlying case is impersonation fraud. He also clarified that a chat room's claim that he told people to 'sell all Samsung Electronics' is untrue, and that his remark to 'reduce exposure' had been distorted. He urged investors not to be swayed by false information.

He explained that whether foreign investors continue to maintain buying in the spot market, as they did yesterday and today, will determine the market's direction.

This means foreign spot buying could serve as a key driver of the broader market rally, and his advice is that investors should gauge the market's trend through spot supply and demand rather than short-term futures movements.

He pointed to the fact that Monday is a market holiday and that the rally could slow if foreign investors push prices lower in the futures market.

This suggests that, given short-term volatility and supply-demand factors, the strong early-session gains may not carry through to the close. Investors should be mindful of volatility before the market closes.

CEO Lee noted that KOSPI opened after breaking above 7,000 points. He stressed that holding the 7,000 level is important, and that investors should keep a close watch on individual and foreign spot flows.

Today, whether foreign investors buy spot will likely be a key factor in determining whether the market can rise further.

This suggests that expectations for a recovery in the semiconductor cycle, along with the distinct investment appeal of SK Hynix, are having a positive effect on its share price.

He noted that the market, which paused in July, is actually showing a rally in early August.

This confirms that the market's short-term uptrend is progressing as expected, and gives investors grounds to view current market sentiment positively.

CEO Lee cautioned investors not to get too excited even as the market recovers. With many investors having been stuck in losing positions and the market only gradually recovering, he advised holding current positions rather than making short-term trades aiming for 10 to 20% gains based on overconfidence.

This is a message to avoid getting fixated on short-term profits during a recovery and losing sight of the long-term perspective.