[Market ING] Focus on Nvidia Earnings... KOSPI Attempts to Break 2800 Level

US CPI Increase Slows for First Time This Year
Expectations Rise on Nvidia-Driven Boost

This week (20th-24th), the direction of the domestic stock market is expected to be determined by the release of the Federal Open Market Committee (FOMC) minutes and the earnings announcement of Nvidia, a key stock in the artificial intelligence (AI) theme. In the absence of significant domestic or external negative factors, attention is focused on whether the index will surpass the 2800 level as concerns about inflation ease following the release of the US April Consumer Price Index (CPI). Securities firms have projected the KOSPI expected range for this week to be between 2700 and 2820.

On the 7th, the KOSPI index opened at 2,718.17, up 41.54 points (1.55%) from the previous trading day, as dealers were working in the Hana Bank dealing room in Jung-gu, Seoul. On the same day, the won-dollar exchange rate started trading at 1,356.5 won, down 6.3 won from the previous trading day. Photo by Jinhyung Kang aymsdream@

According to the Korea Exchange on the 19th, the KOSPI index closed at 2724.62 on the 17th, down 0.11% from the previous week. Individual investors alone sold a net 453.8 billion won, while institutions and foreigners bought net amounts of 583.8 billion won and 288.8 billion won, respectively.

The KOSDAQ index ended trading at 855.06, down 1.05% from the previous week. The large drop in the KOSDAQ index was due to all HLB group stocks closing at the lower limit. Earlier, on the 17th, news that HLB’s targeted anticancer drug 'Rivoceranib' failed to receive FDA approval as a new drug for liver cancer treatment dragged down the stock price.

The securities industry expects that investor sentiment could improve depending on the release of the May FOMC minutes and Nvidia’s earnings on the 23rd (local time). The minutes and comments from Federal Reserve (Fed) officials regarding the April CPI are anticipated to ease concerns about interest rate uncertainty.

Ji-won Kim, a researcher at KB Securities, said, "The Fed’s stance remains cautious but as expected, and the momentum related to the FOMC and CPI has settled for now. Attention should now be focused on Nvidia’s earnings, the Monetary Policy Committee, and the release of the FOMC minutes."

Nvidia’s earnings announcement is also a key event to watch. Wall Street analysts estimate that Nvidia’s revenue for the first quarter of fiscal year 2025, which ended in late April, surged more than threefold compared to a year ago. The average analyst estimate in FactSet surveys is $24.51 billion.

If Nvidia’s earnings exceed market expectations, the US stock market, which has soared to record highs, could rise again. This could lead to gains in the domestic stock market, buoyed by the positive momentum from the US.

Jun-ho Hwang, a researcher at Sangsangin Securities, analyzed, “The continued rise in the semiconductor sector ahead of Nvidia’s first-quarter earnings announcement is seen as a positive factor. Additionally, the expansion of shareholder returns, especially in the financial and insurance sectors that posted strong first-quarter results, is expected to provide further upward momentum to the stock market.”

Jin-hyuk Kang, a researcher at Shinhan Investment Corp., explained, “The heightened expectations so far are a concern. During the first-quarter earnings season, AMD and Arm Holdings posted strong results but plunged due to guidance that fell short of market expectations. While Nvidia’s strong earnings are anticipated, it is more important to focus on whether they meet market expectations.”

NH Investment & Securities suggested a KOSPI expected range of 2700 to 2820 points, noting that the slowdown in US April employment and consumer prices could improve investor sentiment.

Young-hwan Kim, a researcher at NH Investment & Securities, said, “With the confirmation of a slowdown in US April employment and consumer prices, investor sentiment in the stock market is improving. CNN Money’s Fear & Greed Index has shifted from a fear situation one month ago to the early stage of greed currently. There is still room before reaching the extreme greed zone, so investor sentiment has potential to improve further.”