Trump's Tariff Fears Ongoing... "Focus on Semiconductor and Entertainment Stocks" [Weekly Outlook]

NH Investment & Securities Forecasts KOSPI Range of 2550-2700

Securities firms predict that this week (24-28th) the KOSPI index will be limited to a maximum of 2700 points. This is due to continued market uncertainty from U.S. President Donald Trump's comprehensive tariff threats. In this context, market direction is expected to be determined by expectations for strong performance from NVIDIA, the AI semiconductor leader, and stock selection among beneficiaries of China's lifting of the Korean Wave ban (限韓令, ban on Korean content).

On the 23rd, NH Investment & Securities forecasted this week's KOSPI range at 2550-2700. Based on the previous trading day's closing price (2654.58), the maximum upside potential is only 1.71%. This is due to President Trump's strong policy drive to expand tariffs beyond steel and aluminum imports to include semiconductors, automobiles, and pharmaceuticals.

President Trump previously announced on the 10th that he would impose 25% tariffs on all steel and aluminum imports, effective next month on the 12th. On the 18th, he declared additional universal tariffs on automobiles, semiconductors, and pharmaceuticals, expected to take effect as early as April 2nd.

NH Investment & Securities analyst Jung-hwan Na said, "President Trump mentioned April 2nd for the tariff policy announcement, but recently said it could be next month or earlier," adding "While we need to see the details of targeted items, sectors with large exports to the U.S. like semiconductors and automobiles will clearly be impacted."

While Trump's tariff policies are seen as a negative factor weighing on the market, the impact is expected to be less severe than before. Na explained, "The market has been pricing in Trump's tariff concerns since last year," adding "Thus, we're not seeing sharp declines like in 2018."

SK Securities analyst Jun-ki Cho stated, "While Trump's tariff noise continues, we no longer see the volatility of the first day when it targeted Canada, Mexico, and China," adding "Despite sensational news, the market is now responding quite insensitively."

He continued, "There's a growing perception that (tariffs) are for negotiation," adding "If Trump's tariff risks have significantly influenced sector preferences in the market until recently, we should consider the possibility of opposite situations emerging as tariff risks decrease."

Amid these circumstances, attention is focused on NVIDIA's earnings announcement on the 26th (local time). This stems from expectations that if NVIDIA's results exceed market expectations, investment sentiment for domestic semiconductor stocks will improve across the board.

Analyst Na said, "With sales of next-generation AI chip Blackwell starting to be reflected in results from Q4 last year, expectations are growing regarding demand strength for the latest GPUs," adding "If NVIDIA announces results above market expectations, it will be favorable for related semiconductor stocks like SK Hynix."

Expectations for the lifting of China's Korean Wave ban are also expected to continue. After this news, China-related stocks in media, entertainment, and cosmetics surged, and now stock selection is expected to focus on sectors and companies with supporting fundamentals. Among these sectors, the entertainment industry is viewed positively with expectations for improved performance from idol world tours in the second half and K-pop concerts in China.

KB Securities analyst Sun-hwa Lee predicted, "This year's announced Top-Tier artist world tour schedules exclude China," adding "However, if concerts become possible in mainland China with the lifting of the Korean Wave ban, additional audience of over 1 million (assuming 20 shows with 50,000 per show) would be possible."

Jung-sam Ko Hankyung.com Reporter jsk@hankyung.com