The countdown to 'KOSPI 3000' begins... Can it withstand profit-taking pressures? [Weekly Outlook]

KOSPI Weekly Outlook

NH Investment & Securities: "This week's expected range is 2800~3000"

The securities industry anticipates that the KOSPI index will attempt to test the 'KOSPI 3000 points' threshold this week, undergoing a resilience test for short-term profit-taking after the 'honeymoon rally.'

On the 15th, NH Investment & Securities forecasted that this week’s KOSPI movement would be within the 2800–3000 range. As the new government's policy expectations are still at the early stage and as the second phase of the US-China trade agreement has been reached, alleviating tariff concerns, these have been cited as positive factors.

Jung-Hwan Na, a researcher at NH Investment & Securities, explained, "Expectations for domestic demand stimulation following the launch of the new administration, along with hopes for the alleviation of the stock market discount through amendments to the Commercial Act, are serving as the main drivers behind the KOSPI's rise. The fact that the US-China trade negotiations have reached an agreement also positively affects investor sentiment."

He added, "Though there are concerns over the rapid stock price rise, there is also an inflow of funds after policy implementation is confirmed. The policy momentum is expected to extend into sectors such as domestic demand stimulus and investments in artificial intelligence (AI) after the Commercial Act amendments."

Woong-Chan Lee, a researcher at iM Securities, also analyzed, "The ruling party’s majority in the National Assembly enables amendments to be passed, and the government's strong determination is also highly regarded by the market. Strong fiscal spending is further anticipated as a positive catalyst."

Since the new administration was inaugurated on the 3rd, the KOSPI index rose 8.19% by the 12th but pulled back by 0.87% on the 13th amid external geopolitical risks like Middle East crises and the impact of short-term profit-taking, appearing to be catching its breath ahead of the 3000-point breakthrough.

Experts believe the domestic stock market environment is favorable, but the breakthrough of 'KOSPI 3000' this week will depend on global risk factors and appetite for profit-taking.

On the 16th and 17th, economic indicators such as retail sales and industrial production will be announced in China and the United States, raising concerns that the results of the US-China trade dispute may partly be reflected. If the numbers are worse than expected, concerns about another economic downturn may resurface in the US stock market.

Additionally, the surge in oil prices due to the Israel-Iran conflict in the Middle East may increase uncertainty in companies' earnings projections and act as a drag on the index.

Researcher Lee pointed out, "For the market to rise further, stronger buying is needed from either foreign or domestic investors. While the new government's policies are attractive to foreign investors, global risk factors still exist. The possibility of an economic slowdown in the US in the second half of the year is also a concern."

Kyung-Min Lee, a researcher at Daishin Securities, commented, "Currently, even a normalization of KOSPI’s valuation (level of stock price relative to results) makes reaching 3000 points achievable. However, given the number of critical domestic and global issues this week, short-term profit-taking pressures following the recent surge could intensify and should be watched closely."

In addition to economic indicator announcements from the US and China, major events this week include the G7 Summit from the 15th to 17th (local time), the Federal Open Market Committee (FOMC) meeting on the 17th–18th, and the Bank of Japan’s interest rate decision on the 17th.

Jung-Dong Noh, Hankyung.com Reporter dong2@hankyung.com