KRW 160,000 Samsung in sight… KOSPI outlook also bright on a U.S.-led tailwind [Market Preview]

Korea Economic Daily

Summary

South Korean equities are expected to extend their uptrend on a tailwind from U.S. stocks and expectations for earnings season.
SK hynix surged 8.70%, helped by Citi’s target price hike to KRW 1.4 million, and notched “KRW 800,000 hynix” for the first time.
A researcher said short-term volatility could be triggered by the Philadelphia Semiconductor Index strength, potential sell-the-news moves, and lingering KOSDAQ FOMO sentiment, but suggested using it as an opportunity to increase KOSPI exposure through staggered buying.

South Korean equities, having settled at the “5,000 KOSPI” and “1,000 KOSDAQ” milestones, are expected to extend their uptrend on the 28th on the back of a tailwind from U.S. stocks and expectations for earnings season.

The previous session saw both the KOSPI and KOSDAQ settle at 5,000 and 1,000, respectively. The KOSPI closed at 5,084.85, up 2.73%. Unlike the past three sessions, when it briefly touched 5,000 and retreated, it achieved a “5,000 KOSPI” close at the fourth attempt. In the main board market, foreigners and institutions net bought KRW 851.3 billion and KRW 232.7 billion, respectively.

In particular, SK hynix jumped 8.70% to close at KRW 800,000, rising to “KRW 800,000 hynix” for the first time ever. Citi highlighted SK hynix’s strong cash-generation capacity and sharply raised its target price to KRW 1.4 million from KRW 900,000, lifting the share price.

The KOSDAQ also remained strong, closing at 1,082.59, up 1.71%.

Overnight, U.S. stocks ended higher, led by tech. The Dow Jones Industrial Average fell 0.83% from the previous session. The Dow declined as UnitedHealth (-19.61%) plunged. In addition, major health insurers such as Humana (-19.0%) and CVS Health (-13.31%) tumbled on news that the Donald Trump administration would effectively freeze next year’s reimbursement rates for Medicare (a government program that supports medical costs for low-income people) plans offered by private insurers.

The S&P 500 rose 0.41% and the Nasdaq Composite gained 0.91%. Even as controversy over an artificial intelligence (AI) bubble persists, expectations for “blowout results” ahead of key Big Tech earnings lifted the indices. Major “Magnificent Seven” (M7) names, including Tesla, Microsoft and Meta, are set to report quarterly results after the close on the 28th.

With a tailwind from the U.S. market, today’s domestic market is also expected to be positive. Han Ji-young, a researcher at Kiwoom Securities, said, “The market is likely to start higher, supported by strength in the Philadelphia Semiconductor Index (+2.4%) overnight and conciliatory remarks by President Trump (‘We will come up with a solution to tariff hikes with South Korea’).”

She added, “There is room for short-term volatility in the KOSPI, given potential sell-the-news moves after earnings releases for leading stocks such as semiconductors later this week, as well as lingering tremors from FOMO (fear of missing out) sentiment in the KOSDAQ.” However, she said, “Given solid earnings momentum centered on market leaders, it is right to make a strategy of using potential volatility as an opportunity to increase KOSPI exposure via staggered buying.”

Reporter Maeng Jin-gyu maeng@hankyung.com