Dealers work at the trading room of Hana Bank's headquarters in Seoul on Friday, as the Kospi closed down 37.61 points, or 0.60 percent, at 6,258.77. [Yonhap]
Dealers work at the trading room of Hana Bank's headquarters in Seoul on Friday, as the Kospi closed down 37.61 points, or 0.60 percent, at 6,258.77. [Yonhap]

Domestic markets next week will be shaped by US inflation data and the direction of foreign investor flows. This week, the Kospi weakened — led by semiconductor stocks — while the Kosdaq surged sharply, with the two indexes moving in opposite directions. Financial investment industry analysts see the US consumer price index (CPI) due Tuesday and the producer price index (PPI) due Wednesday as the pivotal variables that will determine, through their effect on market interest rates, the won-dollar exchange rate and foreign investor positioning, whether the Kospi can stage a rebound.

According to Korea Exchange, the Kospi closed Friday at 6,258.77, down 37.61 points, or 0.60 percent, from the previous session. Over the week from Monday through Friday, the Kospi fell 5.10 percent while the Kosdaq climbed 10.98 percent.

This week, major US technology companies reaffirmed their commitment to expanding AI capital expenditure through their earnings releases, but large-cap semiconductor stocks came under pressure as concerns mounted over next-generation HBM stacking, optimization of memory capacity per server, and reports of price negotiations between SK Hynix and Nvidia. The Kosdaq, by contrast, posted three consecutive sessions of buy-side circuit breakers as trading volume in single-stock leveraged products declined following the introduction of new regulations on such instruments, with liquidity flowing into the Kosdaq instead.

Next week, US inflation data are widely seen as the key variable setting the market's direction. The US July CPI will be released Tuesday, followed by the PPI on Wednesday. With market interest rates having already eased on the back of softer US employment data, analysts are watching whether the upcoming inflation readings can sustain that stabilizing trend. NH Investment & Securities said that for the July CPI, a sharp acceleration in goods inflation appears unlikely given the slowdown in rental price increases and the stabilization of distributor margins within producer prices. However, it noted that some temporary factors may have contributed to the June CPI's deceleration, leaving room for a partial reversal.

If inflation does not significantly exceed market expectations, long-term interest rates and the won-dollar exchange rate could stabilize, providing a positive backdrop for foreign investor inflows. Lee Jae-won, a researcher at Yuanta Securities Korea, said next week's US inflation data and any easing of geopolitical tensions between the United States and Iran "are expected to determine the direction not only of long-term interest rates but also of semiconductor stocks and foreign investor flows."

On the domestic front, a semiconductor special act — centered on establishing a permanent support framework for the semiconductor industry — takes effect Tuesday. The legislation covers the formation of a governing committee, designation of industrial clusters, and support for infrastructure and workforce development. Analysts are watching whether it will lift sentiment toward the sector. On Wednesday local time — Thursday morning Korean Standard Time — MSCI will release the results of its August quarterly review. Given that index inclusions and exclusions trigger mechanical fund flows, volatility in affected stocks could increase.

A string of corporate earnings releases is also on the calendar. In the United States, CoreWeave and Super Micro Computer (SMCI) are scheduled to report on Tuesday, while Applied Materials (AMAT) reports on Wednesday. Their results are expected to offer a read on whether the AI investment cycle remains intact, given both companies' exposure to data centers and semiconductor equipment.

Earnings forecasts for domestic companies are also improving. According to NH Investment & Securities, the consensus for Kospi controlling-shareholder net profit this year has risen to 791.9 trillion won ($558 billion), up from 757.6 trillion won at the time of SK Hynix's earnings release. The net profit outlook for companies excluding Samsung Electronics and SK Hynix also moved higher, from 219.2 trillion won the previous week to 222.3 trillion won, suggesting that the earnings recovery is broadening beyond the semiconductor sector.

On the foreign investor flow front, analysts note that shareholder return policies and regulatory changes — not just earnings improvement — are also key variables. If Samsung Electronics and SK Hynix announce concrete shareholder return plans, that could draw foreign capital inflows. Attention is also focused on regulatory changes that could prompt a revaluation of undervalued stocks, including a potential overhaul of inheritance and gift taxes.

NH Investment & Securities set its Kospi forecast range for next week at 6,000 to 7,000 points. It cited a recovery in earnings credibility and reduced share price volatility as upside factors, and profit-taking selling and earnings shocks at individual companies as downside risks.

Na Jeong-hwan, a researcher at NH Investment & Securities, said that "at this point, attracting additional foreign capital inflows requires catalysts beyond earnings — such as concrete shareholder return policies or regulatory changes." He added that "if expectations for a revaluation of low price-to-book-ratio stocks expand in the course of an inheritance and gift tax reform, that could serve as a factor drawing in foreign capital."


hajun825@heraldcorp.com