[Market ING] KOSPI Falls Below 2500, Will It Rebound as Uncertainty Eases?

Weekly KOSPI Expected Range: 2,360 to 2,600

Last week, after passing the peak of uncertainty, the KOSPI fell below the 2,500 level. Having absorbed the resumption of short selling, US reciprocal tariffs, and the domestic impeachment ruling, attention is focused on whether the KOSPI will rebound this week (7th to 11th).

Yonhap News

Last week, the KOSPI fell by 3.62% and the KOSDAQ by 0.92%. The KOSPI, which had lost the 2,600 level the previous week, also gave up the 2,500 level last week. The KOSDAQ also dropped to the 680 level. Shin Seung-jin, a researcher at Samsung Securities, said, "Major events that could affect the market, such as the implementation of US tariffs, have concluded. Although there may be short-term fluctuations, the market will gradually stabilize as the major uncertainties have passed."

Concerns about tariffs are expected to gradually ease. Lee Kyung-min, a researcher at Daishin Securities, said, "It is highly likely that the short-term peak of tariff policy uncertainty has passed," adding, "US Treasury Secretary Scott Vestent indicated that the announced tariff rates are the maximum tariff limits by country, and the executive order specifies that tariff rates can be adjusted through negotiations. Tariff concerns will ease during the negotiation process."

Na Jung-hwan, a researcher at NH Investment & Securities, analyzed, "Considering the overall demand and global logistics decline caused by tariffs, domestic demand stocks (distribution and convenience stores) or tariff avoidance stocks (entertainment and securities) could be alternatives. However, once the tariff enforcement enters the country-specific negotiation phase, attention should be paid to tariff-affected stocks (semiconductors and automobiles). Although semiconductors and pharmaceuticals are excluded from reciprocal tariff items, it is necessary to reassess after confirming whether tariffs will be imposed on specific US industries or products, such as imported cars." NH Investment & Securities projected the KOSPI range for this week to be between 2,360 and 2,600.

With the resolution of domestic political uncertainty, the stock market is expected to gradually normalize. Researcher Lee Kyung-min said, "The Constitutional Court's acceptance of the impeachment will largely resolve domestic political uncertainty," and predicted, "Relief will flow into the stock and foreign exchange markets, leading to a rapid normalization." He added, "With the resolution of uncertainty and the development of won appreciation, foreign investor demand is expected to improve, which will strengthen the KOSPI's rebound momentum and lead to relative strength compared to global markets." Lee expects the KOSPI, which was downgraded due to the US tariff shock, to continue its rebound based on support at the 2,430 level, setting the first rebound target at 2,750.

This week's major schedule includes the preliminary earnings announcement of Samsung Electronics on the 8th, marking the start of the first-quarter earnings season. On the 10th, the US March Federal Open Market Committee (FOMC) minutes, US March Consumer Price Index (CPI), and China March CPI will be released. On the 11th, the US March Producer Price Index (PPI) and the University of Michigan Consumer Sentiment Index for April will be announced.

Researcher Lee said, "The keyword for the March FOMC is uncertainty. We will be able to confirm the Trump administration's tariff policy's uncertainty impact on the real economy, lawmakers' evaluations, and their thoughts reflected in the dot plot and economic outlook." He added, "Although expected inflation rose recently due to tariff concerns, March is before the actual tariff imposition, and there were no signs of increased demand such as retail sales. Bloomberg's forecast for the US March CPI is a 2.6% year-on-year increase, indicating a slowdown in the rise. If hard data, unlike sentiment indicators, confirm that inflation is not rising as much as feared, stagflation concerns may ease."

Additionally, Lee said, "Samsung Electronics will announce preliminary results on the 8th, opening the first-quarter earnings season. Recently, a clear rebound trend in leading EPS centered on semiconductors has emerged," adding, "Strong semiconductor exports, visible recovery in the industry, and easing of earnings anxiety will act as a catalyst for the KOSPI's upward momentum."