The KOSPI has recovered above the 7000 mark, and following the Chuseok holiday, the domestic stock market is expected to assess the outcomes of the U.S.-China summit, international oil prices, and trends in U.S. long-term interest rates to determine the potential for further gains. The upcoming release of the U.S. Personal Consumption Expenditures (PCE) price index and Micron's earnings report will also be closely watched to see if the upward trend centered on artificial intelligence (AI) and semiconductors continues.
According to the Korea Exchange, on the last trading day, September 23, the KOSPI closed at 7080.92, up 63.01 points (0.90%) from the previous day. Foreign investors sold a net 504.7 billion won, marking a return to a selling position after four trading days, while individual investors also sold a net 1.4396 trillion won. In contrast, institutional investors purchased a net 316.9 billion won.
Lee Kyung-min, a researcher at Daishin Securities, stated, "The KOSPI has recovered above 7000 as oil prices and bond yields, which had previously constrained the index, have reversed downward. Although it has surpassed the 60-day moving average, resistance remains at the 120-day moving average and the previous high of 7100 to 7200."
The results and follow-up actions from the U.S.-China summit held during the holiday period are expected to be significant variables for the stock market next week. U.S. President Donald Trump and Chinese President Xi Jinping held a summit at the White House on September 24, discussing key issues such as trade and AI. Specific details related to U.S.-China trade negotiations are set to be released on September 28, drawing attention to how these developments will impact the domestic stock market.
International oil prices and the situation in the Middle East are also crucial. Reports of contacts between the U.S. and Iran just before the holiday led to a decline in international oil prices, with both Brent and West Texas Intermediate (WTI) crude trading below $100 per barrel on September 23.
After the holiday, U.S. inflation data and semiconductor earnings are also on the horizon. The PCE price index for last month, set to be released on September 30, will be a key variable influencing U.S. monetary policy and bond yields. Lee noted, "Depending on the divergence from consensus, the probability of a 25 basis point increase at the October Federal Open Market Committee (FOMC) meeting, which exceeds 50%, and fluctuations in bond yields will be determined, highlighting the gap between market expectations and actual inflation."
The same day, Micron's earnings report will serve as an event to gauge expectations for the domestic semiconductor sector. Lee remarked, "This is likely to be an event that confirms the lower bound of performance expectations for Korean semiconductors, and it will be interesting to see if it can trigger a new rally, particularly whether the guidance for the next quarter exceeds market expectations and if the gross margin can be maintained at 86%."
From a valuation perspective, there is an analysis suggesting that the KOSPI still has room for further gains. Lee pointed out that the KOSPI's 12-month forward price-to-earnings ratio (PER) stands at 5.49, which is near historical lows, and proposed a first rebound target of 7600, which corresponds to a forward PER of 6 times.
However, there remains the possibility of increased short-term volatility depending on the outcomes of major events following the holiday. He stated, "During the Chuseok holiday, the U.S.-China summit, the upcoming PCE inflation data, and Micron's earnings will confirm the gap between expectations or concerns and reality, which may slow the pace of valuation normalization but will have limited impact on direction and trend changes."
As a result, the domestic stock market, which will reopen on September 28, will be watched closely to see if it can not only stabilize above the 7000 mark but also attempt to break through the 7100 to 7200 range. With the U.S.-China summit's outcomes, changes in trade policy, international oil prices, U.S. long-term interest rates, the PCE inflation data, and Micron's earnings all set to be confirmed, how well these events align with market expectations will be key variables influencing future index movements.
* This article has been translated by AI.
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