[Market ING] KOSDAQ Surges as KOSPI Takes a Breather

KOSPI Weekly Forecast Range: 3,000 to 3,250
Market Eyes on Mutual Tariffs and Earnings Announcements

The KOSPI is attempting to establish itself above the 3,200 mark. While the KOSPI has entered a consolidation phase, the KOSDAQ has risen sharply, surpassing the 820 level for the first time in a year. As the mutual tariff imposition scheduled for August 1 approaches, the market is expected to focus on tariff negotiations. In addition, this week’s scheduled earnings announcements by major U.S. and domestic companies are anticipated to influence market movements.

Yonhap News Agency

Last week, the KOSPI rose by 0.39%, while the KOSDAQ climbed by 2.52%. Kim Jiwon, a researcher at KB Securities, analyzed, “After reaching the 3,200 level, the KOSPI entered a consolidation phase with repeated sector rotation, whereas the KOSDAQ demonstrated relative strength as it underwent a catch-up rally. Investor sentiment remained robust, supported by favorable results in key indicators such as the U.S. Consumer Price Index (CPI) and corporate earnings.”

On July 18, the KOSDAQ closed at 820.67, reaching the 820 mark for the first time in a year. This was the first time the KOSDAQ closed above 820 since July 19 of the previous year, when it ended at 828.72. Kang Jinhyuk, a researcher at Shinhan Investment Corp., explained, “While the KOSDAQ had been left behind during the KOSPI rally, it attempted to catch up as the KOSPI paused for breath. In particular, the simultaneous strength in battery materials stocks and biotech companies played a significant role.”

As the mutual tariff implementation date approaches, the market is expected to become increasingly sensitive to tariffs. Lee Kyungmin, a researcher at Daishin Securities, stated, “As the August 1 mutual tariff deadline nears, global stock markets may be affected not only by economic indicators but also by the progress and outcome of tariff negotiations. If the results of the tariff negotiations do not exceed investor expectations, there is a possibility that the previously priced-in optimism could weaken, especially if accompanied by tough rhetoric from U.S. President Donald Trump.”

Shin Seungjin, a researcher at Samsung Securities, commented, “The KOSPI is still undergoing a period of adjustment, but if a breakthrough trade agreement is reached just before the August 1 mutual tariff imposition, the Korean stock market could see another rally. However, since the recent market rally was not based on upward revisions to corporate earnings, there is skepticism about further gains. The reason domestic companies’ earnings forecasts have not risen is due to significant tariff uncertainty for key export items such as automobiles and semiconductors. If Korea-U.S. trade negotiations are concluded at the end of July or early August, it would be a major turning point for the Korean stock market.”

This week’s scheduled earnings announcements by major companies are expected to influence the market. Lee noted, “On July 23, the earnings and guidance of big tech companies such as Alphabet and Tesla will impact the outlook for domestic industries. In Korea, major companies including Samsung Biologics (July 23), SK Hynix, Hyundai Motor, KB Financial Group, Kia, HD Hyundai Heavy Industries, Samsung Heavy Industries, and LG Household & Health Care (July 24) are set to announce their results. It will be important to watch whether the momentum continues in the leading sectors of the first half, such as artificial intelligence (AI), finance, shipbuilding, and cosmetics.”

Na Jeonghwan, a researcher at NH Investment & Securities, predicted, “With the U.S. mutual tariff imposition scheduled for August 1 and the start of the second-quarter earnings season, market participants will focus on the impact of U.S. tariffs on earnings. However, despite the U.S. sending a letter on August 8 regarding a 25% mutual tariff on Korea, the KOSPI still closed up 1.8%, indicating strong inflows into Korean equities. During the earnings season, there will likely be a sorting of stocks within sectors that have already seen significant price gains (such as holding companies and securities) based on whether earnings momentum is sustained.” NH Investment & Securities presented a forecast range for the KOSPI this week of 3,000 to 3,250.

This week’s key events include Korea’s export data for July 1-20 and the U.S. Conference Board Leading Economic Index for June on July 21, and the U.S. Richmond Federal Reserve Bank’s Manufacturing Index for July on July 22. On July 24, Korea’s second-quarter GDP and the U.S. S&P Global Manufacturing Purchasing Managers’ Index (PMI) for July will be released, followed by U.S. durable goods orders for June on July 25.

Earnings announcements by major U.S. and Korean companies will also continue. Verizon will report on July 21; General Motors (GM), Coca-Cola, and Texas Instruments on July 22; Alphabet, Tesla, AT&T, and IBM on July 23; and Intel on July 24. In Korea, HD Hyundai Electric will report on July 22; Samsung Biologics, LG Innotek, LG CNS, and OCI on July 23; and SK Hynix, Hanwha Engine, Samsung Heavy Industries, KB Financial Group, and Hyundai Motor on July 24.