[Market ING] Foreign Demand is Key... KOSPI Expected to Range Between 2690 and 2800

Weekly KOSPI Index Expected Between 2690 and 2800
Attention Needed on China-Related Export Stocks

This week (17th?21st), the domestic stock market is expected to continue its upward trend as major events such as the U.S. Federal Open Market Committee (FOMC) meeting in June conclude. Securities firms forecast that the KOSPI index will move between 2690 and 2800 points this week.

As the U.S. stock market reached an all-time high, the domestic stock market on the 14th saw both the KOSPI and KOSDAQ start with slight gains but fluctuated up and down afterward. The won-dollar exchange rate also rose slightly. Photo by Heo Younghan younghan@

According to the Korea Exchange on the 16th, the KOSPI index closed at 2758.42 on the 15th, up 3.53 points (0.13%) from the previous trading day. Over the week, the KOSPI rose 1.31%, while the KOSDAQ fell 0.46%. Notably, foreigners concentrated their purchases on Samsung Electronics and SK Hynix, with nearly 2 trillion won flowing into these two companies alone. This is interpreted as a recovery in investment sentiment toward semiconductor stocks, driven by Nvidia, the AI leader, undergoing a stock split and expectations of strong semiconductor exports.

Experts predict that the net buying trend by foreigners will continue this week as well. NH Investment & Securities projected the KOSPI index range for next week to be between 2690 and 2800 points. Recommended sectors for investment include semiconductors, shipbuilding, defense, and IT components and hardware related to on-device AI.

Jung-Hwan Na, a researcher at NH Investment & Securities, said, "With big events like the FOMC and the Worldwide Developers Conference (WWDC) over, investors may engage in profit-taking. However, given the ongoing possibility of interest rate cuts in the second half of the year and expectations for AI industry growth, we maintain a positive outlook on sectors where export unit prices are improving."

This week, indicators related to the Chinese market also warrant close attention. On the 17th, China will release data on May industrial production, retail sales, and fixed asset investment. Depending on the manufacturing conditions and export trends in China, domestic indices are likely to be affected.

Kyung-Min Lee, a researcher at Daishin Securities, stated, "China’s May retail sales are expected to grow 3% year-on-year, an improvement from April’s 2.3% growth. This marks a rebound in consumption momentum after six months. With clear recovery in manufacturing conditions and export momentum, the addition of consumption momentum recovery will strengthen expectations for China’s economic recovery."

Lee added, "If expectations for China’s consumption recovery are realized, semiconductor stocks are expected to rise, and undervalued growth stocks such as secondary batteries, internet, and pharmaceutical/biotech sectors?previously neglected due to rising bond yields?are likely to gain attention."

Expectations for growth in the AI industry remain valid. Jung-Hwan Na of NH Investment & Securities said, "The launch of AI iPhones equipped with generative AI is expected in the second half of the year, sustaining interest in on-device AI. As the on-device AI device market blossoms, it is worth paying attention to IT components and equipment sectors such as multilayer ceramic capacitors (MLCC)."

He continued, "From June 1 to 10, South Korea’s average daily export value increased by 11.2%, indicating continued export strength. We maintain a positive view on sectors with improving export unit prices, including not only K-culture-related cosmetics but also semiconductors and food and beverages."