[Market ING] KOSPI Approaching 2600 Level, Will the Uptrend Continue?

KOSPI Weekly Forecast Band: 2500 to 2640

The KOSPI has smoothly overcome the tariff wave originating from the U.S., approaching the 2600 level last week by touching it intraday, raising expectations for a breakthrough above 2600. Experts foresee a continued normalization of KOSPI’s valuation due to the easing of uncertainty around Trump’s tariffs and the calming of earnings anxiety.

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Last week, the KOSPI rose by 2.74%, and the KOSDAQ increased by 1.81%. The KOSPI maintained a four-day consecutive upward trend and even reached the 2600 level intraday on the 14th. Jinhyuk Kang, a researcher at Shinhan Investment Corp., explained, "With China’s 10% retaliatory tariffs on the U.S. taking effect and the U.S. announcing 25% tariffs on steel and aluminum imports, along with mutual tariffs involving multiple countries, the sensitivity to tariffs has diminished, limiting the shock." He added, "Along with Samsung Electronics’ recovery attempts, the KOSPI rose more than 2%." Last week, Samsung Electronics regained the 55,000 KRW level. Kang said, "The resolution of legal risks surrounding Samsung Electronics Chairman Lee Jae-yong, expectations for participation in Stargate, supply of application-specific integrated circuits (ASIC) and high-bandwidth memory (HBM) by big tech companies, improved mobile demand due to China’s 'igu hwan sin' (replacement of old with new), news of NAND price rebounds, and strong sales of the Galaxy S25 in Korea and India all played a combined role."

As the market has somewhat adapted to the tariff issue, its influence is gradually diminishing, leading to opinions that tariff-related volatility could present buying opportunities. Jeonghwan Na, a researcher at NH Investment & Securities, stated, "Since tariff risks were somewhat anticipated and the tariffs are not universal tariffs that the market fears most, the impact on stock prices appears somewhat limited." He added, "Short-term stock price volatility is expected following the Trump administration’s detailed announcement of mutual tariffs, but recently the market tends to view tariff-related volatility as a buying opportunity. It is necessary to take price drops as chances to buy." NH Investment & Securities projected the KOSPI’s expected band for this week to be between 2500 and 2640.

With uncertainties that had suppressed the market gradually easing, the KOSPI’s recovery is expected to continue. Kyungmin Lee, a researcher at Daishin Securities, said, "The KOSPI is moving out of a severely undervalued zone as uncertainties such as tariffs, inflation, and impeachment issues both domestically and internationally ease." He added, "The end of the Q4 earnings season last year will lead to a calming of earnings anxiety, stabilization, and a reversal to an upward trend in leading earnings per share (EPS), and the KOSPI’s valuation, which remains undervalued compared to global markets, will continue to normalize." He further noted, "The first target for valuation normalization is the 2650?2670 range, and an attempt to break through 2650 is possible within February."

Key schedules for this week include the release of the U.S. February New York Federal Reserve manufacturing index on the 18th, U.S. January housing starts on the 19th, and the publication of the U.S. January Federal Open Market Committee (FOMC) minutes on the 20th. On the 21st, the U.S. February S&P Global manufacturing and services Purchasing Managers’ Index (PMI) and the U.S. January Conference Board Leading Economic Index will be announced.