Next week’s South Korean stock market is expected to extend its upward trend on easing Middle East geopolitical concerns and stronger corporate earnings, though analysts warned that short-term volatility could rise as investors digest major events. After the KOSPI pushed past its previous peak, some see a near-term pause in the rally.
According to the Korea Exchange on May 1, the KOSPI fell 92.03 points, or 1.38%, in the previous session to close at 6,598.87. Over the four trading days from April 27 to 30, the KOSPI rose 1.90% while the Kosdaq fell 0.95%.
This week, expectations of easing geopolitical tensions combined with solid earnings to support gains. With hopes for U.S.-Iran talks intact, global markets largely took a breather, but South Korean shares stayed firm, led by IT and industrials, extending a record-high rally.
Rising profit estimates, especially for semiconductors and other IT names, helped drive the benchmark higher. Continued foreign inflows lifted the KOSPI above 6,700, and South Korea’s stock market capitalization climbed to eighth in the world, surpassing the United Kingdom. The Kosdaq lagged amid the impact of some biotech-related events.
Cho Chang-min, a researcher at Hyundai Motor Securities, said the KOSPI has “overcome war risk” and continued higher after breaking above its prior peak. He said the combination of rising prices and a falling price-to-earnings ratio suggests earnings forecasts are improving faster than prices are recovering. “As long as earnings continue to pull prices higher, there is room for further gains after the breakout,” he said.
For next week, analysts said the market may face bigger swings even if the broader uptrend holds. With major events such as the U.S. Federal Open Market Committee meeting and earnings reports from big tech companies wrapping up, markets are expected to move into a phase of digesting new information.
A rebound in oil prices and a hawkish monetary-policy stance could weigh on sentiment. Still, expanding investment in artificial intelligence infrastructure and improving earnings are expected to provide support. Analysts also said expectations for an end to the war could help sentiment ahead of the expiration of the U.S. War Powers Act deadline.
At the same time, a cluster of global market holidays — May 4 (China, Japan and the U.K.), May 5 (South Korea, China and Japan) and May 6 (Japan) — could thin trading, while profit-taking may add to a short-term pause. Analysts said leadership could remain with semiconductors and industrials, while investors should also watch for possible rotation into consumer-related shares.
Kang Jin-hyuk, a researcher at Shinhan Investment Corp., said inbound demand is expected as Japan’s Golden Week runs from April 29 to May 6 and China’s Labor Day holiday runs from May 1 to 5. He said investors should check whether strong earnings momentum continues in consumer sectors such as hotels and leisure, cosmetics, and retail.
* This article has been translated by AI.
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