[Market ING] KOSPI Gradually Advances Amid Uncertainty

Weekly KOSPI Outlook:
Market Eyes U.S. FOMC and Economic Indicators
Volatility Expected to Ease as Uncertainty Subsides
Q2-Q3 Uptrend Forecast Despite Ongoing Trade Tensions

Despite ongoing uncertainty, the KOSPI continues its upward trend. This week (May 7?9), the market is expected to be influenced by the U.S. Federal Open Market Committee (FOMC) meeting in May and various economic indicators following the holiday period.

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Last week, the KOSPI rose by 0.53%, while the KOSDAQ fell by 1.07%. The KOSPI has maintained an upward trend for three consecutive weeks, although the pace of gains has slowed, whereas the KOSDAQ turned downward after four weeks. Kang Jin-hyuk, a researcher at Shinhan Investment Corp., explained, "Last week, the KOSPI continued its rally, entering an overbought zone on expectations that trade friction had peaked. Comments by U.S. President Donald Trump suggesting that tariff negotiations would conclude within the next three to four weeks and that reasonable tariffs would be set, along with news of retroactive easing of auto parts tariffs, helped ease market concerns." He added, "The KOSDAQ was weak due to poor performance in the healthcare sector. After the opening of the American Association for Cancer Research (AACR 2025), there was strong sell-off at the peak in Cellon, and news that Orum Therapeutics voluntarily discontinued its U.S. Phase 1 clinical trial for its core breast cancer drug candidate (ORM-5029) acted as a negative factor for the industry."

As uncertainty subsides, the market is expected to enter a phase of reduced volatility. Lee Kyung-min, a researcher at Daishin Securities, stated, "The Trump administration's unpredictable policies and escalating U.S.-China trade conflict remain sources of market burden. Both the U.S. and China have imposed high tariffs to the extent that mutual trade is virtually impossible, and a 'truth game' continues over whether trade negotiations will proceed, maintaining a tense atmosphere." He continued, "However, we believe the phase of heightened uncertainty has passed. The intensity of rhetoric and retaliatory measures is gradually diminishing, and we expect the market to move into a phase of reduced uncertainty and lower volatility."

There are also forecasts that stock prices will trend upward in the second and third quarters. Na Jeong-hwan, a researcher at NH Investment & Securities, said, "Although uncertainty remains regarding tariffs and policy, stock prices have been rising in anticipation. While volatility could increase due to strong statements from Trump or deteriorating economic indicators, considering policy expectations, we forecast an upward trend in stock prices in the second and third quarters. In addition to expectations for a rate cut by the U.S. Federal Reserve (Fed), there is also anticipation for U.S. fiscal policy." NH Investment & Securities presented this week's expected KOSPI band as between 2,480 and 2,650.

This week's major events include the release of the U.S. April ISM Services Index on May 5 and China's April Caixin Services Purchasing Managers' Index (PMI) on May 6. The U.S. FOMC meeting for May is scheduled for May 8, and on May 9, China will announce its April import and export trends.

Earnings announcements from major U.S. and domestic companies will also continue. On May 5, Berkshire Hathaway and Palantir will release their results, followed by AMD and Meta on May 6, and Novo Nordisk on May 7. Among domestic companies, SM, Lotte Chilsung, Kakao Pay, Kakao Games, and Kakao Bank will announce their results on May 7; Kakao, CJ ENM, KT&G, Studio Dragon, and APR on May 8; and NAVER on May 9, all reporting their first-quarter earnings.

Kang commented, "With the earnings season for U.S. big tech (large information technology companies) coming to an end and the holiday period (May 5?6) in between, macroeconomic and tariff issues could become key factors. While a rate freeze is the dominant expectation for the May FOMC, the Fed's perspective on the impact of tariffs on the economy will be noteworthy. As both the U.S. and China are starting to show the effects of trade friction in their economic indicators, market sensitivity to data releases will increase."