KOSPI Drops After Record Surge... Securities Analysts Say "Rebound Likely in August"

Securities Industry: "KOSPI to Challenge 8,000 This Month"
Three Record Highs for Semiconductors After a 27% Plunge in the Previous Rally

On the 3rd, employees were monitoring the stock market and exchange rates in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. On that day, the KOSPI started at 6358.27, down 3.6% from the previous trading day, continuing its downward trend, while the KOSDAQ began at 709.00, down 1.3%, before turning upward. August 3, 2026 Photo by Jo Yongjun

The KOSPI started the first trading day of August with a decline, as profit-taking sells emerged following an unprecedented short-term rally. However, analysts in the securities market believe that July's sharp decline in the KOSPI was excessive compared to the fundamentals, and there is a prevailing outlook that it will rebound in August. Expectations remain high that AI-related stocks, including those in the semiconductor sector, will continue to lead the market.

KOSPI Drops Over 3% on First Day of August

As of 10:00 a.m. on August 3, the KOSPI was trading at 6,356.37, down 3.62% from the previous trading day. On July 31, the previous session, the KOSPI rebounded from three consecutive days of steep losses to close at 6,595.45, up 1,001.89 points (17.91%). These represent the largest rise and highest single-day increase on record. The rally was driven primarily by semiconductor stocks, such as SK hynix, which closed at its upper limit for the first time.

However, today’s session is showing a downward trend due to profit-taking by mainly foreign investors. As of 10:01 a.m., foreign investors had net sold about 1.3 trillion won in KOSPI, while institutions had a net selling position of 600 billion won. Only individuals are net buying, with a total of 1.9 trillion won. Meanwhile, the KOSDAQ is trading up 2.41% at 737.08.

The two major semiconductor stocks have pulled the KOSPI down. As of 10:03 a.m., Samsung Electronics was trading at 245,750 won, down 6.38% from the previous day, while SK hynix was down 5.56% at 1,622,500 won. Other notable decliners include LG Energy Solution (-4.57%), Samsung Biologics (-3.64%), KB Financial Group (-0.71%), Samsung Life Insurance (-6.42%), and Samsung C&T Corporation (-5.69%).

Over the weekend, easing tensions between the United States and Iran slightly alleviated uncertainties surrounding the stock market. U.S. President Donald Trump abruptly canceled a large-scale military operation against Iran—initially expected to take place over the weekend—on August 1 (local time). Trump stated, “An agreement has been reached regarding the Strait of Hormuz,” adding, “There will next be an agreement on the nuclear issue, or what can be called Iran’s denuclearization.” Hopes for a deal led to declines in international oil prices and U.S. Treasury yields, while U.S. stock index futures rose, reflecting positive sentiment in the market.

Securities Industry: "KOSPI to Challenge 7,000–8,000 in August"

Analysts in the securities industry believe the KOSPI will attempt to break through at least the 7,000 mark this month, rebounding from its sharp drop. Daishin Securities stated that if the KOSPI stabilizes in the mid-to-high 6,000-point range, a surge to 8,000 points in the short term is entirely possible. Lee Kyungmin, a researcher at Daishin Securities, said, “Given that earnings forecasts for this year and next are being revised upward, the KOSPI has entered an extremely undervalued phase. If it settles in the 6,500 to 6,800 range, the index could once again surpass 8,200 points, corresponding to a forward price-earnings ratio (PER) of seven times.” Lee emphasized, “There is no real benefit to selling at current prices. On the contrary, it is advisable to use volatility to acquire or hold positions actively.”

Kiwoom Securities set the upper end of its August KOSPI forecast at 7,800. Han Ji-young, a strategist at Kiwoom Securities, remarked, “The domestic equity market is currently in an area of excessive decline and at a valuation level that historically offers attractive entry points—this is the bottom zone. Now is the time to prepare for a rebound by gradually buying to increase the allocation to domestic equities.” Taking into account earnings momentum and the extent of the decline, he recommended sectors such as semiconductors, IT hardware, defense, distribution, securities, and bioscience.

Hana Securities set an initial KOSPI target of 7,400 points, based on the historical PER low of 6.3 times seen during the global financial crisis. Lee Jaeman, a researcher at Hana Securities, predicted, “If U.S. interest rate rises are contained and foreigners shift to net buying in the KOSPI, the index will gradually raise its floor. Sectors with sharp drops in foreign ownership within KOSPI—and significant declines in PER from the peak—such as software, automobiles, semiconductors, electrical equipment, and media, are likely to see swifter price recoveries.”

Many analysts believe that semiconductor stocks will lead the rebound. DS Investment & Securities argued that, although semiconductor stocks have recently undergone steep corrections and the debate about earnings peaking has intensified, it is premature to conclude that the current semiconductor supercycle is over or that the upward trend is finished.

According to the firm, during the 2017–2018 memory cycle, operating profits for both Samsung Electronics and SK hynix peaked in the third quarter of 2018. In terms of share price, Samsung Electronics hit a high on November 1, 2017, then declined before rebounding between March and May 2018. In contrast, SK hynix, a pure memory player, saw its first peak on October 11, 2017, followed by a 27% correction over about four months until early February 2018. However, its share price then jumped 30% in just one month, reaching a record high on March 14, 2018, and again on May 23, 2018, before finally falling.

Lee Surim, a researcher at DS Investment & Securities, said, “There are no signals of oversupply at all, and the average selling price (ASP) increase rate for DRAM in the third quarter will also exceed previous estimates. Even taking a conservative view, the operating profit peak will be in the fourth quarter of next year, and share prices are likely to attempt new record highs again through the first half of next year.”

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