Volatility to Persist in Kospi as Nvidia Earnings, Jackson Hole Loom
Summary
- Brokerages put this week’s expected Kospi range at 6,400 to 7,500, saying a volatile market centered on semiconductor shares is likely to continue.
- They said Nvidia earnings due on Aug. 27 and the durability of the AI investment cycle could act as a trigger for a stock-market rebound.
- They said the direction of risk appetite and whether valuation normalization continues will hinge on PCE, the Jackson Hole meeting, and moves in US Treasury yields.
Forecast Trend Report by Period
NH Investment & Securities sees the Kospi at 6,400 to 7,500
Middle East conflict and US long-term Treasury yields remain key variables
Nvidia earnings to test the AI cycle
PCE data and Jackson Hole speech may offer rate clues
Brokerages expect South Korea’s stock market to remain volatile this week from Aug. 24 to Aug. 28, with semiconductor shares at the center of the swings. The Middle East conflict and instability in long-term US Treasury yields remain key variables. Still, some analysts say this week’s Nvidia earnings could restore upward momentum if they confirm the durability of the artificial intelligence investment cycle.
NH Investment & Securities on Aug. 23 presented a 6,400-to-7,500 range for the Kospi this week. That implies upside of as much as 8.49% from the previous session’s close of 6,912.95.
High international oil prices and elevated long-term US Treasury yields are seen as factors limiting gains. Negotiation deadlines tied to a memorandum of understanding between the US and Iran to end hostilities have expired, while President Donald Trump has signaled strong economic sanctions on Iran, extending tensions.
In that environment, Nvidia’s earnings report due on Aug. 27 could mark a turning point for the stock market. Strong results and positive guidance could trigger a rebound, analysts said.
Lee Kyung-min, an analyst at Daishin Securities, said investors should check whether Nvidia raises guidance for the next quarter, defends gross margins, ramps up Blackwell production and offers a shipment outlook for Rubin. He also said the market needs to assess how effectively Nvidia can attract outside funding for its newly announced AI finance platform while limiting any direct financial burden on the company.
The US will release July personal consumption expenditures data on Aug. 26, and Federal Reserve Chair Kevin Warsh is scheduled to deliver a keynote speech at the Jackson Hole meeting on Aug. 28. Given Warsh’s stance on reducing forward guidance, direct remarks on the future rate path may be limited. Instead, brokerages are focused on how he views the US Treasury’s decision to double the cap on buybacks of longer-dated bonds.
Lee said that if the PCE data again confirms cooling inflation and eases concerns over monetary policy, risk appetite could strengthen as US Treasury yields stabilize.
Na Jung-hwan, an analyst at NH Investment & Securities, said renewed coordination between fiscal and monetary policy would help steady volatility in long-term yields. That could ease discount-rate pressure on equities. He added that if Nvidia’s earnings confirm the AI cycle remains intact and the Jackson Hole keynote helps calm swings in Treasury yields, equity valuations should continue to normalize.
Meanwhile, the three major US stock indexes closed higher in the final session of last week. Volatile and rising US Treasury yields continued to weigh on sentiment, but confidence improved after data showed the US services sector remained in expansion. The Dow Jones Industrial Average rose 517.80 points, or 0.98%, to 53,277.01. The S&P 500 gained 33.21 points, or 0.43%, to 7,674.37. The tech-heavy Nasdaq Composite added 113.29 points, or 0.44%, to 26,180.46.
Ko Jung-sam, Hankyung.com reporter jsk@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.