[Market ING] Q1 Earnings Season Arrives... KOSPI Attempts to Stabilize Above 2700

FOMC Outcome and Nvidia-Driven Optimism
Boosted Last Week's KOSPI Rally
Brokerage Firms Project KOSPI Range Between 2690 and 2810

The domestic stock market this week (25th-29th) is expected to continue its upward trend due to anticipation of the Q1 earnings season and the disappearance of uncertainties related to U.S. interest rates. Attention is focused on whether the KOSPI index, boosted by the Nvidia-driven momentum following last week's U.S. Federal Open Market Committee (FOMC) results, will surpass the 2800 mark.

On the 21st, the KOSPI showed a strong rise of over 2%, closing above 2,700 points in the 2,750 range. Employees are working in the newly built Infinity Seoul dealing room at the Hana Bank headquarters. Photo by Younghan Heo younghan@

According to the Korea Exchange on the 24th, the KOSPI closed last week at 2748.56, up 81.72 points (3.06%) from the previous week (2666.84). During this period, foreigners and institutions purchased stocks worth 3.069344 trillion KRW and 998.497 billion KRW respectively in the securities market, while individuals net sold 4.112566 trillion KRW.

The index showed strength due to the Federal Reserve's maintenance of its 2024 interest rate cut outlook and Jensen Huang, CEO of Nvidia, stating that he is currently verifying Samsung Electronics' High Bandwidth Memory (HBM) products. Following Jensen Huang's remarks, the stock prices of Samsung Electronics and SK Hynix surged significantly, and the KOSPI even broke through the 2750 level.

This upward trend is expected to continue this week as well. NH Investment & Securities has projected the KOSPI range for next week to be between 2690 and 2810. Factors driving the market up include expectations for AI growth, Korea's Q1 earnings season, and corporate value-up programs, while bubble concerns and U.S. inflation instability are seen as downward factors.

Kim Young-hwan, a researcher at NH Investment & Securities, said, "Investors' next focus is on U.S. employment in March and the Q1 earnings season. Positive signals are being detected regarding Korean companies' earnings outlooks, such as March exports and Micron's results, which have expanded the potential for further stock market gains."

Lee Kyung-min, head of the FICC Research Department at Daishin Securities, evaluated, "At this month's FOMC, the dot plot maintained three rate cuts for this year, allowing the global financial market to enter a phase of eased tension for the time being. The KOSPI can also attempt further gains."

However, he added, "For the KOSPI to surpass the 2800 level, either bond yields need to decrease to enable valuation level-ups, or strong earnings momentum must support it. It is necessary to confirm whether the driving force for the index's rise is secured."

Notable sectors to watch this week include semiconductors, IT hardware, IT home appliances, and displays, encompassing the broader IT sector. Kang Jae-hyun, a researcher at SK Securities, said, "Foreign investors are showing interest in sectors that currently have high economic beta, strong growth momentum, or can benefit from value-up policies. Among these, since the economic beta can become stronger after the FOMC, attention should be paid to the broad IT sector."