Expected KOSPI Range: 2650~2770 Forecast
Ahead of the earnings report of Nvidia, the leading AI semiconductor stock, the Korean stock market is expected to move around the 2700 level this week (26th to 30th). Although the uncertainty regarding the direction of interest rates has eased as a September rate cut is almost certain, the U.S. presidential election remains a variable. Securities firms have projected the KOSPI index to trade within a range of 2650 to 2770 this week.
According to the Korea Exchange on the 25th, the KOSPI index closed at 2701.69, up 4.46 points (0.17%) for the week of the 19th to 23rd. The KOSDAQ index ended at 773.26, down 1.66% from the previous week. This is attributed to the recovery of investor sentiment following strong Q2 earnings reports from companies that disclosed their results last week.
During this period, institutional investors net purchased 349.2 billion KRW in the securities market, while foreigners and individuals net sold 22.1 billion KRW and 307.5 billion KRW, respectively.
This week, the market direction is expected to be determined by Nvidia’s earnings. Experts predict that Nvidia posted a net income of 64 cents per share and revenue of $28.65 billion for the quarter from May to July.
Lee Kyung-min, a researcher at Daishin Securities, said, “Through Nvidia’s earnings guidance, we need to confirm the sustainability of demand from front-end (industries close to end consumers) big tech companies and examine whether Nvidia’s high operating margin and growth can be maintained through new product launches. This is expected to influence the consensus on the business conditions and earnings of the domestic semiconductor sector.”
Kang Jin-hyuk, a researcher at Shinhan Investment Corp., stated, “Domestic semiconductor stocks are trading in a narrow range amid cautious observation of Nvidia’s earnings. If concerns about AI profits are alleviated through Nvidia’s earnings announcement, it will likely bring a fresh boost to domestic semiconductor stocks along with new record highs.”
With the September U.S. rate cut becoming a foregone conclusion, uncertainty about the interest rate path has somewhat eased. On the 23rd (local time), Federal Reserve Chairman Jerome Powell clearly signaled a rate cut during his speech at the Jackson Hole meeting, stating, “I am increasingly confident that inflation will return to the 2% target level in a stable manner. The time for policy adjustment has come.”
Kim Young-hwan, a researcher at NH Investment & Securities, said, “Since investors strongly interpreted the July FOMC minutes as signaling a September rate cut, the additional impact on financial markets is expected to be limited. As investors reach a consensus on the rate cut, uncertainty regarding this variable is expected to decrease for the time being, and attention should be paid to remaining uncertainties such as AI.”
He also pointed out Nvidia’s earnings announcement and the U.S. presidential candidates’ TV debate scheduled for the 10th of next month as remaining uncertainty factors. Additionally, the July Personal Consumption Expenditures (PCE), the Fed’s most trusted inflation gauge, will be released on the 30th.
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