Nvidia's earnings and the Jackson Hole meeting are expected to be the key variables in whether Korea's benchmark KOSPI can hold above the 7,000 level this week. With Samsung Electronics (005930.KS) and SK hynix (000660.KS) having announced large shareholder-return plans last week, how much longer that effect will last is also a focus.
The KOSPI closed at 6,912.95 on the 21st, up 60.37 points, or 0.88%, from the previous session, the Korea Exchange said on the 24th. The index showed extreme volatility last week, plunging 5.80% on the 19th on the fallout from surging U.S. long-term Treasury yields before rebounding 5.89% on the 20th. Over the week from the 18th to the 21st, the KOSPI fell 0.93% and the KOSDAQ dropped 7.25%.
Nvidia's earnings are cited as the first variable that will determine the KOSPI's direction this week. Nvidia will report second-quarter results at around 5:20 a.m. Korea time on the 27th and hold a conference call at 6 a.m. If the results confirm sustained demand for high-bandwidth memory (HBM) and artificial intelligence (AI) infrastructure, investor sentiment toward Korean chipmakers could strengthen as well. The market is watching not only revenue but also gross margins, data-center growth, demand for Blackwell and the shipment outlook for the next-generation Rubin.
"Strong Nvidia results and positive guidance could improve investor sentiment across AI and semiconductors and serve as a trigger for a second rebound in the market," said Lee Kyung-min, an analyst at Daishin Securities. "That said, we cannot rule out the possibility that upside momentum will be limited even with better earnings, as external uncertainties persist."
U.S. long-term yields, which have recently capped the market's gains, are another variable. The U.S. 30-year Treasury yield rose above 5.3% on the 18th local time, its highest level in 19 years since 2007, weighing on global equities. The surge has eased somewhat after the U.S. Treasury expanded the size of its long-term bond buybacks, but concerns over the fiscal deficit and the supply of government bonds remain. The Treasury's announcement that it will unveil new economic sanctions on Iran on the 24th is another source of uncertainty.
For this reason, the market's attention is focused on the Jackson Hole meeting held on the 27th to 29th local time. A key point to watch is how Federal Reserve Chair Kevin Warsh will frame the recent rise in long-term yields and the Treasury's expanded buybacks in his keynote speech on the 28th local time.
In Korea, the Bank of Korea's Monetary Policy Board meets on the 27th. Along with the rate decision, changes in growth and inflation forecasts reflecting an improving semiconductor market, as well as an assessment of the won-dollar exchange rate that has recently fallen to the 1,300-won range, are expected to affect the market.
Whether the shareholder-return effect from Samsung Electronics and SK hynix will continue is also a focus. SK hynix's shares rose for two straight sessions after it announced a 40 trillion won ($28.8 billion) share buyback and cancellation on the 19th. Samsung Electronics announced a shareholder-return plan of up to 110 trillion won ($79.2 billion) on the 21st, but its shares fell instead as disappointed sellers emerged in the after-hours market. The reaction reflected the fact that little detail beyond the cash dividend was provided and no additional shareholder-return measures were presented.
Despite the market's disappointment, analysts expect that the successive large shareholder-return plans from KOSPI heavyweights such as Samsung Electronics and SK hynix will lead to a re-rating of valuations across the market. "Korea's stock market is in a phase where its valuation standard is being reshaped from a simple earnings cycle (PER) to a trend of returning shareholder value (ROE)," said Kim Jong-min, an analyst at Samsung Securities. "Regularizing shareholder returns based on earnings growth is a key driver that will resolve the chronic Korea discount and lead a valuation re-rating across the market."
