Semiconductor sell-off ahead of Samsung Electronics earnings; 6.4% drop in SK hynix ADR weighs on sentiment.
Oil prices rebound, pushing 10-year U.S. Treasury yields back to 5.31%; Asian markets trade lower.
Major Market Trends
① Caution ahead of Samsung Electronics earnings; semiconductor stocks slump.
The index initially attempted a rally in early trading, buoyed by declining U.S. bond yields and positive sentiment surrounding AI-related earnings.
The easing of fiscal concerns in France exerted downward pressure on yields, while optimistic guidance from U.S. AI heavyweights, including AMD and Marvell Technology, provided an initial boost.
However, semiconductor stocks faced heavy selling pressure as investors turned cautious ahead of Samsung Electronics' upcoming earnings report, further exacerbated by weakness in U.S. memory stocks.
The 6.4% plunge in SK hynix’s ADR, combined with a stronger Korean Won, uncertainty regarding employee bonuses, and reports of potential delays in certain data center construction projects, weighed heavily on memory sector sentiment.
The approaching conclusion of share buyback programs by both Samsung Electronics and SK hynix is also acting as a technical headwind for liquidity and demand.
② Mideast tensions drive oil price rebound; 10-year yield returns to 5.31%.
International oil prices rebounded following reports of ongoing military skirmishes between Saudi forces and Houthi rebels.
Heightened anxiety regarding regional stability in the Middle East surged following news of airstrikes, including reports of damage to airport facilities.
The rise in oil prices pushed the yield on the 10-year U.S. Treasury note back up to 5.31% during Asian trading hours.
Adding to the gloom, news of Google suspending a data center construction project in Finland reignited recurring concerns regarding delays in global AI infrastructure investment.
LG Electronics' release of earnings that fell short of market expectations further deepened market jitters ahead of the impending Samsung Electronics results.
③ Large-cap growth stocks see outflows; pharmaceuticals, entertainment, and cosmetics gain.
Recently dominant sectors including semiconductor parts and equipment (materials/components/equipment), automobiles, secondary batteries, and telecommunications equipment underperformed.
Conversely, buying interest flowed into pharmaceuticals, entertainment, cosmetics, securities, and shipping.
As capital rotated out of large-cap growth stocks, the market witnessed continued divergence, with specific sectors bucking the downward trend.
Supply, Demand, and Sector Performance
Foreign investors were net sellers of KOSPI-listed electrical and electronic equipment, transportation equipment, finance, and metals, while net buying in chemicals, food and beverage, retail, and insurance.
Institutional investors were net sellers of electrical and electronic equipment and transportation equipment, while adding to positions in finance and chemicals.
On the KOSDAQ, both foreign and institutional investors net sold machinery/equipment and electrical/electronics, while showing net buying interest in entertainment-related stocks.
Market Outlook
Caution and a "wait-and-see" approach have intensified ahead of Samsung Electronics' earnings release. While the market anticipates solid results, the focus has shifted from absolute profit figures to the sustainability of the improvement trend.
Given the high volatility in the semiconductor industry recently, some analysts suggest it is necessary to verify the stability of future earnings through long-term contracts. Additionally, the impending completion of share buybacks by Samsung Electronics and SK hynix is weighing on supply-demand dynamics.
With several public holidays early in October, option-related events—including weekly options and monthly expirations—are concentrated in the first half of the month. Given the confluence of earnings, oil price fluctuations, bond yields, and the end of major share buybacks, market volatility is expected to persist for the time being.
However, the fundamental improvement trend in the semiconductor sector remains intact. Even as index volatility persists, stock-specific rallies are likely to continue; investors should monitor shifts in supply and demand, focusing on recently strong sectors and stocks tied to government policy and infrastructure investment.
Source: Sijang-man's Stock Story (t.me/shmstory)
YouTube: Sijang-man TV www.youtube.com/@blueoak1004
This article has been reconstructed from a Telegram post by "Sijang-man's Stock Story" with the author's consent. All content may contain errors and does not constitute a recommendation to buy or sell; it should not be used as a basis for trading decisions. The contents of this post cannot be used as legal evidence under any circumstances.
