[Good Morning Stock Market] "Volatility Is Easing"... KOSPI Expected to Enter a Consolidation Phase

US Shares End Mixed After New Highs

Upward Momentum from Strait of Hormuz Normalization Optimism

Downside Pressure from Semiconductor Profit-Taking

There are forecasts that the domestic stock market will enter a period of consolidation, reducing its volatility.

As the KOSPI surged over 4% on the back of favorable U.S. developments, triggering an intraday buy-sidecar, employees at the dealing room of Hana Bank headquarters in Jung-gu, Seoul, were monitoring the stock market and exchange rates. At 9:02 a.m. on that day, the KOSPI was up 263.27 points (4.14%) from the previous close, expanding its gains to 6,622.22. August 5, 2026 Photo by Jo Yongjun

On the 5th (local time), the US stock market closed mixed. The Dow Jones Industrial Average ended at 54,349.12, up 263.24 points (0.49%) from the previous session. The S&P 500 index closed at 7,723.55, down 12.97 points (0.17%), while the tech-heavy Nasdaq Composite fell 221.55 points (0.83%) to finish at 26,363.44.

There were upward factors such as optimism for normalization in the Strait of Hormuz, and strong performance from Nvidia (up 3.4%) driven by expectations of improved server demand. However, selling pressure persisted following profit-taking in artificial intelligence (AI) and semiconductor stocks, as well as the stock price declines of AMD (down 7.0%) and SpaceX (down 13.6%). In particular, sharp gains in the stock market, as a result of strong performance by Microsoft, Amazon, and Palantir—which confirmed robust AI demand and the possibility of continued investments—led to pronounced profit-taking activity.

On this day, the domestic stock market is expected to show a period of consolidation, characterized by sector rotation, amid increased expectations of easing geopolitical tensions and supply from profit-taking following rapid short-term rebound.

This month, the intraday volatility of the KOSPI has dropped to 3.2% over the past three trading sessions. Last month, the KOSPI's intraday volatility was 7.1%, setting the highest record since 1990. As the perception of the KOSPI being oversold in terms of price and valuation remains valid, buying interest at lower prices has been supporting the index when it experiences sharp intraday declines.

It cannot be definitively stated that volatility has normalized to historical averages. The VKOSPI—a forward-looking volatility index—peaked at 96.9 points on June 29, then declined to 78.6 points, but it is still above its historical average (in the 20-point range). However, with the second quarter earnings season underway, concerns over AI investment and memory demand are easing, and complications stemming from the domestic equity leverage regulations have been reduced, making it unlikely that volatility will surge significantly.

Han Ji-young, a research analyst at Kiwoom Securities, said, "Currently, the market is going through a normalization phase following abnormal volatility, so there is technical room for further gains," and added, "Rather than selling into rebounds, it is advisable to maintain current positions or gradually accumulate shares in sectors with strong earnings momentum, such as semiconductors, securities, retail, and defense, especially in the event of an additional correction."

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