"No Negative Factors in Sight to Halt KOSPI's Surge... 'Ohcheonpi' Within Reach [Market ING]"

Weekly KOSPI Projected Range: 4,400 to 4,800

The KOSPI has continued its upward trend for 11 consecutive trading days, reaching the 4,800 mark. With only about 160 points left to the "Ohcheonpi" (5,000-point milestone), attention is focused on whether the index will succeed in breaking through the 5,000 level this week.

Yonhap News Agency

Last week, the KOSPI rose by 5.55%, while the KOSDAQ increased by 0.70%. Kim Jongmin, a researcher at Samsung Securities, commented, "The KOSPI's rally has been remarkably steep. Since the beginning of the year, the index has posted gains every trading day, reaching 4,841 points." He analyzed, "In addition to the solid performance of the two leading semiconductor stocks (Samsung Electronics and SK Hynix), active rotation among large-cap stocks in sectors such as shipbuilding, defense, nuclear power, automobiles, and holding companies is justifying the index's level-up."

Although the index is rising rapidly, earnings forecasts are also improving, so valuation pressure remains limited. Lim Jeongeun, a researcher at KB Securities, stated, "Despite the record rally, upward revisions to earnings estimates during the earnings season have kept the 12-month forward price-to-earnings ratio (PER) at 10.3 times, so valuation pressure is not high." She added, "A positive market trend is expected to continue for the time being."

Lee Kyungmin, a researcher at Daishin Securities, also said, "As the market digests the pre-earnings season, forward earnings per share (EPS) has risen to 465 points, meaning that despite the share price increase, valuation pressure is actually declining." He predicted, "With the KOSPI's forward PER at about 10.3 times, the earnings momentum is likely to persist for now."

While the semiconductor sector, which had previously led the index with significant gains, has seen its rally slow, expectations are rising for continued sector rotation. Lee explained, "After major industry events such as the world's largest electronics and IT exhibition, CES 2026, the concentration in certain sectors like semiconductors is easing and spreading out." He continued, "Sector rotation is unfolding, focusing on undervalued industries relative to earnings, which is further strengthening the KOSPI's upward momentum." He added, "With expectations for the earnings season, sector rotation is likely to continue for the time being."

Na Jeonghwan, a researcher at NH Investment & Securities, analyzed, "While profit-taking in semiconductor stocks, which led the KOSPI's rise at the beginning of the month on earnings expectations, has caused some weakness in their share prices, a sector rotation rally has emerged with significant gains in other industries such as automobiles, defense, and shipbuilding, allowing the KOSPI to maintain its upward trend."

However, given the steepness of the rally, there is a need to prepare for a potential correction. Kim pointed out, "The fact that there are currently no visible negative factors to halt the KOSPI's surge is, paradoxically, the biggest risk." He emphasized, "Since the rally has been relentless, it is time to consider moderating the pace in anticipation of a possible technical correction due to short-term overheating."

Na also noted, "Recently, value stocks such as steel and chemicals have been rebounding. From a portfolio perspective, it is worth considering a barbell strategy that includes both traditional AI leaders and value stocks in sectors like finance and materials." NH Investment & Securities presented a KOSPI forecast range of 4,400 to 4,800 for this week.

This week's key events include the release of China's fourth-quarter 2025 GDP, December retail sales, industrial production, and fixed asset investment on the 19th. On the 21st, Korea's export figures for January 1-20 will be announced. On the 22nd, Korea's fourth-quarter 2025 GDP and the US November personal consumption expenditures (PCE) price index will be released. On the 23rd, the US January S&P Global manufacturing purchasing managers' index (PMI) will be published. In addition, the World Economic Forum in Davos will be held from the 19th to the 23rd.

Lee commented, "The release of the PCE inflation data has been delayed due to the government shutdown (temporary work stoppage), so there is a policy lag and it is unlikely to change the direction of monetary policy in the short term." He continued, "Following the release of December employment and inflation data, the economic trend will be reconfirmed, and a rate freeze in January is already a foregone conclusion." However, he added, "If the results deviate significantly from expectations, it should be recognized as an event risk."