[Good Morning Market] Trump Says "No Resumption of War"... Korean Stock Market Eyes Rebound

Semiconductor Stocks Rebound Amid Mixed U.S. Markets
KOSPI Night Futures Surge Over 4%
"Recent Decline Was Excessive... A Rebound Is Likely"

Buoyed by the rebound of U.S. semiconductor stocks and U.S. President Donald Trump's remarks that "there will not be a resumption of war," the Korean stock market is expected to attempt a rebound on July 9.

On July 8 (local time), the U.S. stock markets closed mixed. The Dow Jones Industrial Average declined by 576.76 points (1.09%) to 52,348.39. The S&P 500 fell by 21.14 points (0.28%) to 7,482.71. On the other hand, the Nasdaq Composite rose by 51.96 points (0.20%) to close at 25,870.65 during the same period.

The KOSPI index started the session on a downward trend on the 8th. The exchange rate, KOSPI, and KOSDAQ indexes are displayed on the status board in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. 2027.07.08 Photo by Dongjoo Yoon

Notably, semiconductor stocks, which had been declining recently due to concerns over a "peak-out," managed to rebound. Micron rose by 1.1%, and SanDisk climbed by 6.9%. This is attributed to the inflow of bargain-hunting demand.

Securities analysts believe that concerns about a semiconductor peak-out, combined with the geopolitical issues between the U.S. and Iran, led to increased selling pressure. For this reason, President Trump's statement, "I don't think (war) will start again," is being interpreted as an opportunity for a rebound. Seo Sangyoung, a researcher at Mirae Asset Securities, commented, "The recent decline in the Korean stock market can be attributed to ongoing uncertainty in the semiconductor sector, the U.S.-Iran conflict triggering additional selling, and a supply-demand vacuum, all of which contributed to significant downside volatility. Considering that President Trump has taken a step back, there is a high possibility that the Korean market may recover today."

However, he also predicted that volatility would remain high. Seo noted, "News about a U.S. military strike near the market close, combined with options expiration day, is likely to further expand volatility. In addition, issues surrounding the semiconductor sector are still ongoing. Furthermore, as demonstrated in the minutes of the Federal Reserve meeting following rate hikes by the European Central Bank (ECB) and the Bank of Japan (BOJ), the global liquidity tightening remains a factor sustaining volatility."

Han Jiyeong, a researcher at Kiwoom Securities, also forecasted a potential rebound in the Korean stock market today. He explained, "Despite concerns over the breakdown of the ceasefire between the U.S. and Iran, the recent three consecutive days of sharp declines have led to a perception of overselling. The rebound in U.S. semiconductor stocks and the 4.1% surge in the KOSPI 200 night futures are creating incentives for bargain hunting, enabling the market to recover the losses from the previous day's plunge."

He also suggested that the recent sharp drop might have already pushed the Korean market into a "bottom zone." As an example, he pointed out that the KOSPI's forward price-to-earnings ratio (PER) fell to 6.25 the previous day, dropping below the 6.27 level seen at the trough of the 2008 financial crisis. Han noted, "Whenever the KOSPI has declined by more than 20% from its previous 52-week high, such as during the 2008 financial crisis, the 2011 U.S. credit rating downgrade and European debt crisis, and the 2020 COVID-19 pandemic, a major crisis was the trigger. What differentiates the current situation is that there are no signs of the Korean market being in or on the verge of a major crisis, yet it has experienced a sharp decline."

He added, "Given that the recent series of steep declines have occurred without any visible deterioration in fundamentals, the expected value of further declines is now low."

This content was produced with the assistance of AI translation services.