[Market ING] KOSPI Recovering, Will the Uptrend Continue?

Weekly KOSPI Expected Range: 2450 to 2580

After the Lunar New Year holiday, the KOSPI, which had sharply declined due to the combined impact of DeepSeek and U.S. tariffs, has gradually shown signs of recovery, regaining some of the levels seen before the holiday. Attention is now focused on whether this recovery trend will continue this week (February 10-14).

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Last week, the KOSPI rose by 0.18%, and the KOSDAQ increased by 2.01%. Although the KOSPI plunged 2.5% on the 3rd due to the U.S. tariff issue, it recovered the losses with three consecutive days of gains in the 1% range. Lee Kyung-min, a researcher at Daishin Securities, explained, "Due to the impact of DeepSeek and concerns over tariffs from the Trump administration, the KOSPI fell below the 2450 level early last week. However, Mexico and Canada, which are subject to the 25% tariff, accepted the Trump administration's border reinforcement demands, leading to a postponement of tariff imposition. China's retaliatory measures were interpreted as a strategic move to strengthen its negotiating position, which brought in expectations for trade negotiations, resulting in a successful rebound of the KOSPI."

Although relief was reflected last week due to the tariff postponement, concerns over tariffs still remain a factor that could increase market volatility, warranting caution. Na Jung-hwan, a researcher at NH Investment & Securities, said, "Although U.S. President Donald Trump's tariff imposition was postponed, a phone call between Chinese President Xi Jinping and President Trump has not yet taken place," adding, "The direction of the stock market will be determined based on the outcome of that call." NH Investment & Securities has set the expected KOSPI range for this week at 2450 to 2580.

Since U.S. tariff policies inevitably pose a burden on South Korea, there are opinions that attention should be paid to stocks benefiting from the Trump administration's policies or those unaffected by tariffs. Shin Seung-jin, a researcher at Samsung Securities, said, "It is true that U.S. tariff policies burden export-driven economies like South Korea, but the Trump administration's ultimate goal is not tariffs themselves but to use tariffs as a tool to secure greater benefits for the U.S. Moreover, the biggest risk the Trump administration wants to avoid in this process is volatility in the financial markets caused by policy uncertainty. From a stock perspective, investing thoroughly in companies that benefit from the Trump administration's policies or are unaffected by trade uncertainties would be a better choice."

The U.S. employment market in January remains robust. On the 7th (local time), the U.S. Department of Labor announced that nonfarm payrolls increased by 143,000 compared to the previous month. Jeon Gyu-yeon, a researcher at Hana Securities, analyzed, "This figure fell short of the expected 175,000. However, employment figures for November and December last year were revised upward from 212,000 to 261,000 and from 256,000 to 307,000 respectively, showing that the employment market continues to maintain a solid trend." He added, "It is judged that 2 to 3 rate cuts are possible within the year, but since the U.S. Federal Reserve (Fed) emphasizes data-driven policy decisions, the pace of rate cuts will likely be moderated until concerns about the employment market materialize."

Key schedules for this week include the release of the U.S. January Consumer Price Index (CPI) on the 12th, the U.S. January Producer Price Index (PPI) on the 13th, and the U.S. January retail sales and industrial production on the 14th. Researcher Lee Kyung-min said, "The headline CPI for January is expected to remain steady at 2.9%, with the core CPI slightly slowing to 3.1%. This is due to the end of the year-end shopping season, base effects, and the easing of one-time factors such as abnormal weather and avian influenza. However, caution is needed as there is a possibility of preemptive reflection of the January Los Angeles wildfires and tariff concerns." He added, "If inflation indicators meet or fall below expectations, relief will flow into the market, and confidence in the Fed's monetary policy will increase."

U.S. and major domestic companies will also release earnings reports. On the 10th, McDonald's will report, followed by Coca-Cola on the 11th, Cisco on the 12th, and Airbnb, Unilever, and Moderna on the 13th. Domestic companies will release their fourth-quarter results as follows: CJ CheilJedang and Doosan Bobcat on the 10th; Hana Tour, NCSoft, Kakao Games, Krafton, and Pearl Abyss on the 11th; and Kakao and Doosan Robotics on the 13th.