Hantoo Securities "April Stock Market Expected to Remain Sideways... KOSPI Band Suggested at 2450~2650"

Korea Investment & Securities expects the stock market in April to likely remain sideways, presenting a monthly KOSPI expected range (band) of 2450 to 2650 points. Key risks to watch include the so-called 'Trump mutual tariffs' announcement and the resumption of short selling, while also suggesting a 'low-risk, moderate-return' strategy.

Researchers Kim Dae-jun, Park Ki-hoon, and Kim Geon-woo from Korea Investment & Securities stated in their April investment strategy monthly report titled "April Strategy: Let's Fill Modestly," released on the 31st, "The stock market in Q2 will not differ significantly from the trajectory of Q1. We expect sideways movement in April."

Korea Investment & Securities noted, "Lower interest rates are favorable for the index. However, earnings remain a concern," adding, "Earnings slowdown due to export regulations could obscure the direction of the index." They also mentioned, "The dollar-won exchange rate, which has been on the rise since Q4 last year, may be unfavorable for foreign investor demand, so the index is expected to fluctuate around the current level." The April KOSPI band presented on this day corresponds to a consensus-based 12-month forward (12MF) price-earnings ratio (PER) of 9.5 to 9.2 times and a 12-month trailing (12MT) price-to-book ratio (PBR) of 0.85 to 0.92 times. According to the Korea Exchange, the KOSPI closed at 2557.98 on the 28th, breaking below the 2600 level on a closing basis.

In particular, Korea Investment & Securities pointed out Korea's high external sensitivity, stating, "The tariff policies pursued by the second Trump administration (Donald Trump's second term) are leading to a deterioration in the trade environment." The export business outlook index for Q2 was confirmed to be weaker than in Q1. The import regulation and trade friction item (45.4) recorded its lowest level since the survey began. Korea Investment & Securities expressed concern, saying, "Most companies listed on the Korean stock market that significantly affect stock prices are export companies, and an unfavorable environment has been created for them," adding, "Uncertainty is expected to continue for the time being."

Accordingly, sector selection remains important in April as well. Korea Investment & Securities suggested, "Ahead of President Trump's mutual tariff announcement, the investment appeal of export and domestic stocks may differ," recommending, "In an environment where import regulations and trade frictions are intensifying, focus should be on stable domestic stocks rather than export stocks facing difficulties." They further stated, "Now is the time to focus on low-risk, moderate-return rather than high-risk, high-return," citing related sectors such as holding companies, platforms, gaming, media, and telecommunications.

From a risk perspective, attention should be paid not only to Trump's tariffs but also to the resumption of short selling starting from this day. Korea Investment & Securities predicted, "Once short selling begins, stock price volatility will rapidly increase," warning, "Stocks with rapidly increasing loan balances may be shaken, causing the index to lose direction." They diagnosed that especially short-term rapidly rising stocks will be exposed to selling pressure. However, they also added, "If these are high-return, high-growth stocks that fluctuate in the short term, it may be necessary to observe them from a contrarian perspective."