Following a sharp decline in U.S. stock markets and a significant drop in the KOSPI, attention turns to whether the domestic market can attempt a rebound this week. External factors such as rising long-term U.S. interest rates, geopolitical risks from the Middle East, and concerns over NVIDIA's earnings are expected to increase market volatility.
On May 18, the Korea Exchange reported that the KOSPI closed at 7493.18, down 488.23 points (-6.12%) from the previous trading day. The index briefly surpassed 8000 during the session but experienced significant fluctuations as profit-taking emerged.
This week, the KOSPI is expected to continue its high volatility as it reacts to U.S. interest rate trends, comments from Federal Reserve officials, and NVIDIA's earnings report. Kiwoom Securities has projected a weekly KOSPI range of 7150 to 7700.
Analysts are also considering the possibility of a technical rebound following the recent sharp decline. The KOSPI's drop of over 6% last Friday has led to perceptions that the recent losses were excessive. The rapid rise of major global stock markets, driven by an AI rally, is also seen as a factor for correction. From the beginning of this month until May 14, the KOSPI surged 21.0%, while the Nasdaq rose 7.0% and Japan's Nikkei 225 increased by 5.7%.
The biggest focus this week will be NVIDIA's earnings. The company is set to release its first-quarter results on May 21 at approximately 5 a.m. Korean time.
Market participants are keenly watching how NVIDIA's revenue and profitability will compare to expectations. The current market consensus anticipates revenue of $78 billion and a gross profit margin (GPM) of 75.0%. Key variables include demand for the Blackwell (B200) and the production schedule for the next-generation Rubin (R100), as well as the impact of sales to China. These factors are directly linked to the earnings outlook for domestic semiconductor companies like Samsung Electronics and SK Hynix.
Analysts believe that if NVIDIA exceeds market expectations with its earnings and guidance, it could reverse the recent negative sentiment in global markets affected by concerns over interest rates and inflation.
Additionally, this week will see comments from key Federal Reserve officials, the release of the April FOMC minutes, U.S. May inflation expectations data, and Japan's April Consumer Price Index (CPI), all of which are likely to heighten market sensitivity to macroeconomic events.
In South Korea, the planned strike by Samsung Electronics' labor union on May 21 is also seen as a potential variable. If negotiations fail, the possibility of an actual strike and the government's consideration of emergency mediation could impact investor sentiment in the domestic market.
Han Ji-young, an analyst at Kiwoom Securities, stated, "While we may see a technical buying trend due to perceptions of excessive short-term losses early this week, macroeconomic uncertainties are likely to persist."
Meanwhile, as of 8:09 a.m., major large-cap stocks are showing weakness in pre-market trading. Samsung Electronics is trading down 0.55% at 269,000 won, while SK Hynix (-1.65%), Hyundai Motor (-1.71%), and Kia (-1.31%) are also experiencing declines.
Stocks related to shipbuilding and nuclear power, which had recently seen significant gains, are also facing notable declines. HD Hyundai Heavy Industries is down 3.44%, and Doosan Enerbility has dropped 3.34%. SK Square is also down 3.10%. Additionally, most of the top market capitalization stocks, including LG Energy Solution (-1.68%), Samsung Electro-Mechanics (-0.89%), and Samsung Biologics (-0.35%), are showing downward trends.
* This article has been translated by AI.
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