[Market ING] KOSPI Expected to Attempt Rebound Amid Heightened Caution Ahead of Holiday

Weekly KOSPI Projection: Expected Range of 6,400 to 7,500

Last week, the KOSPI displayed a "weak start, strong finish" pattern, ending the week at the 6,800-point range. This week, caution in the market is expected to intensify ahead of the Chuseok holiday.

Yonhap News Agency

Last week, the KOSPI fell by 0.23%, while the KOSDAQ rose by 0.79%. Lim Jeongeun, a researcher at KB Securities, analyzed, "On the 18th, the domestic stock market was led higher by strong performance in major semiconductor stocks. Foreign investors shifted to net buying after eight trading sessions, with institutions also turning to net buying. However, some of the gains were given back late in the session, so the KOSPI failed to reclaim the 6,900-point level." She continued, "On a weekly basis, the KOSPI and KOSDAQ posted returns of around -0.2% and 0.7%, respectively. As the market digested major monetary policy events in major economies, related uncertainties partially eased."

Despite interest rate hikes in the United States and Japan, global markets have remained resilient, though there are opinions that volatility may increase in the short term. Paek Jongmin, a researcher at Samsung Securities, stated, "Global asset markets are digesting monetary policy events. Despite decisive rate hikes by the U.S. Federal Open Market Committee (FOMC) in September and the Bank of Japan (BOJ), the market is interpreting this not as a tightening shock but as a resolution of uncertainty, maintaining a solid trend." He added, "In the short term, the combination of slower global liquidity expansion and ongoing geopolitical uncertainty could heighten index volatility. However, rather than succumbing to downside fear, this is a time to prepare for upside risks going forward."

While caution is expected to intensify ahead of the holiday-related market closure this week, some analysts view the increased volatility before the holiday as an opportunity to increase positions. Lee Kyungmin, a researcher at Daishin Securities, commented, "Following the hawkish (tightening-preferential) September FOMC, bond yields have actually stabilized. This is because uncertainty over U.S. monetary policy has already been priced in." He continued, "For the time being, attempts to rebound grounded in stabilized oil prices and bond yields are expected to continue." He added, "However, as caution strengthens ahead of the Chuseok holiday in Korea, there is a possibility of profit-taking, but the increased volatility before the holiday presents a chance to add positions."

Na Jeonghwan, a researcher at NH Investment & Securities, predicted, "If U.S. long-term yields retreat amid solid earnings among domestic companies, stock prices will begin to test the upper end of the valuation range." NH Investment & Securities set the expected KOSPI band for this week at the 6,400–7,500-point range.

This week's key events include South Korea's export data for September 1–20 to be announced on the 21st, and the U.S. Richmond Federal Reserve Manufacturing Index to be released on the 22nd. On the 23rd, the U.S. S&P Global Manufacturing and Services Purchasing Managers' Index (PMI) for September will be announced, followed by U.S. August new orders for durable goods on the 25th.

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