[Good Morning Market] All Eyes on Samsung's Earnings... Will It Ignite a KOSPI Rally?

On January 6, the domestic stock market is expected to see its upside capped, influenced by profit-taking sentiment in recently surging semiconductor stocks.

Previously, on January 5 (local time), the New York stock market rose across the board as investment sentiment rebounded, particularly in infrastructure reconstruction beneficiaries, despite geopolitical issues related to Venezuela. The S&P 500 index, focused on large-cap stocks, gained 43.58 points (0.64%) to close at 6,902.05. The tech-heavy Nasdaq rose 160.193 points (0.69%) to finish at 23,395.82. The blue-chip Dow Jones Industrial Average jumped 594.79 points (1.23%) to end at 48,977.18, marking a new all-time high.

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Since the beginning of the year, the KOSPI has soared nearly 6% in just two trading days, creating a mixed atmosphere of both overheating concerns and optimism in the securities industry. Some analysts point out that the recent index trend mirrors the pattern seen in January 2021, when the market surged in the first week and then underwent a correction.

Han Ji-young, a researcher at Kiwoom Securities, stated, "Today, the domestic stock market is likely to see its upside limited, despite the overall strength of the US market, due to profit-taking pressure following the recent surge in semiconductor stocks over the past two trading days and the wait-and-see sentiment ahead of Samsung Electronics' preliminary earnings release." However, she added, "Even if the index faces downward pressure in the short term, it is likely to be a temporary pause. With earnings visibility improving, I recommend keeping the upside open for the index at least through the first quarter of this year."

While the fourth-quarter earnings season is typically not highly anticipated due to factors such as bonus payments and one-off expenses, expectations are higher this time, especially for semiconductor companies. In particular, the fourth-quarter results of Samsung Electronics and SK Hynix, scheduled to be announced this month, are expected to deliver 'earnings surprises' that exceed market expectations, driven by soaring memory prices and favorable exchange rates.

Han pointed out, "Currently, the 2026 operating profit expectations for Samsung Electronics and SK Hynix stand at 9.8 trillion won and 8.5 trillion won, respectively, but major foreign brokerages such as JP Morgan, Citi, and Nomura are projecting figures in the 15 trillion won range for each company. Given the strong earnings momentum, it is appropriate to further raise the upper end of the index." She raised the annual KOSPI range from the previous 3,500-4,500 to 3,900-5,200.

Stabilization of the exchange rate, driven by the spread of risk asset preference, is also seen as a positive factor. The iM Securities Research Center commented, "As risk appetite spreads, we can expect downward pressure on the value of the won to ease. It is also favorable that foreign investors are showing strong net buying in the KOSPI, particularly in spot trading." The center added that attention should be paid to whether the US Treasury's currency report, to be released today, mentions the Korean won.