KOSPI slides on Samsung Electronics and SK hynix sell-offs; supply-demand pressures weigh on large-caps.
KOSDAQ breaks through 910; foreign and institutional investors drive rotation across battery, materials, parts, equipment, and robotics sectors.
Key Market Trends
① Oil price decline offers relief, but rates and dollar remain headwinds
International oil prices dipped following a recovery in Middle Eastern crude supply and Saudi Arabia’s decision to lower export prices for Asian markets.
However, geopolitical uncertainty persists due to ongoing military tensions between Saudi Arabia and Houthi rebels, as well as stalled negotiations between the U.S. and Iran.
The U.S. 10-year Treasury yield remains elevated at around 5.3%.
Political instability in France and Spain has triggered a weaker Euro and a stronger U.S. dollar, placing additional burden on South Korean large-cap stocks.
② Samsung Electronics and SK hynix face selling pressure; share buybacks nearing conclusion
Market supply-demand dynamics are under pressure as Samsung Electronics and SK hynix approach the end of their respective share buyback programs.
Samsung Electronics is set to conclude its buyback this week, with SK hynix following next week.
With these buybacks having effectively absorbed significant foreign selling pressure, investors are closely monitoring market liquidity post-conclusion.
Concerns ahead of Samsung Electronics' upcoming earnings release have further fueled selling pressure on both stocks.
③ KOSDAQ climbs above 910; sector rotation boosts indices
Capital is shifting toward the KOSDAQ, which remains relatively insulated from the supply-demand pressures affecting KOSPI large-caps.
Driven by joint buying from foreign and institutional investors, the index saw gains in secondary batteries, semiconductor materials, parts, and equipment (SAPE), and robotics.
IT component suppliers like Samsung Electro-Mechanics and LG Innotek, alongside stocks in petrochemicals, solar energy, PCBs, cybersecurity, and quantum computing, also posted gains.
The KOSDAQ continues to see a rotation where large sectors trade leadership to propel the index higher.
Supply, Demand, and Sectors
In the KOSPI, foreign investors were net sellers of electric/electronics and transportation equipment, while net buying occurred in construction, medical precision, chemicals, and general services.
On the KOSDAQ, foreign and institutional buying was concentrated in machinery/equipment, finance, and pharmaceuticals.
Institutional investors were net buyers of electric/electronics, finance, and metals on the KOSPI.
Market Commentary
The recent rebound in the equity market is driven more by the easing of existing headwinds rather than the emergence of major new catalysts. As expectations for AI investment remain intact, the cooling of the aggressive climb in interest rates and oil prices has created a more favorable environment for index gains.
For the KOSPI, the supply-demand dynamics of Samsung Electronics and SK hynix remain critical in the near term. With share buybacks concluding and Samsung’s earnings announcement on the horizon, short-term volatility is likely. However, both companies remain in an earnings recovery cycle, and anticipation for further shareholder return initiatives persists.
Conversely, the KOSDAQ has demonstrated a clear focus on individual stock performance since September. Investment capital is rotating from semiconductor materials and communication equipment into secondary batteries, robotics, and pharmaceuticals. Foreign and institutional investors are alternating between key sectors to push the index upward.
We are in a phase where performance divergence between sectors is widening, rather than a broad index-wide trend. Investors should monitor whether the current rotation continues, focusing on recent outperformers, companies with strong second-half earnings, and policy-driven or investment-themed stocks.
Source: Sijwang-man’s Stock Story (t.me/shmstory)
YouTube: Sijwang-man TV www.youtube.com/@blueoak1004
This article is a reconstructed summary of a Telegram post by “Sijwang-man,” published with the author’s consent. All content is subject to error and does not constitute investment advice; it should not be used as the basis for any buy or sell decisions. The content herein holds no legal standing under any circumstances.
