KOSPI Slips Back After Touching 7,000 on Oil, Rate and Trade Pressures

* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six news items tailored to each reader type.

1. KOSPI Slips Again Just Short of 7,000 as Oil and Rate Burdens Persist

- Key points: The KOSPI closed at 6,954.52 on the 8th, down 40.87 points, or 0.58%, from the previous session. The index recovered the 7,000 level during trading for the first time in 15 sessions since the 18th of last month, but fell quickly ahead of the close and turned lower. Amid continuing tensions between the United States and Iran, news of a strike on a Saudi Arabian oil facility pushed international oil prices higher, while trade friction between the United States and Canada also weighed on investor sentiment. Lee Jin-woo, head of the research center at Meritz Securities, said that interest rates crossing a critical threshold could affect liquidity, and that the reaction of market rates after the consumer price index (CPI) release and the rate decision will be important.

2. Earnings Expectations Jump, Drawing Attention to Chemical, Construction and Insurance Stocks

- Key points: According to FnGuide data, 14 of the 22 KOSPI sectors saw net profit forecasts for both 2026 and 2027 raised over the past month. Chemicals saw net profit forecasts for this year and next rise 7.92% and 8.32%, respectively, while insurance posted the largest increase overall with a 13.30% rise in next year's forecast. Construction forecasts were also lifted by expanded housing supply and increased investment in artificial intelligence (AI) data centers and power grids. However, with the KOSPI's projected 12-month net profit growth rate down 8 percentage points from its peak last month, analysts say sector selection based on profitability indicators has become more important.

3. Big Tech Strikes $2 Trillion in Deals While Korea Focuses Only on Value-Up

- Key points: According to the investment banking industry and Samil PwC, global mergers and acquisitions (M&A) totaled $2.003 trillion (about 2,688 trillion won) in the first half of this year, a 42% jump from a year earlier. Megadeals of $5 billion or more accounted for 40% of the total, with funds flowing into core AI infrastructure such as semiconductors, power and data centers. In Korea, by contrast, Samsung Electronics (005930.KS) acquired Germany's ZF advanced driver assistance systems (ADAS) division and the FläktGroup for a combined 3 billion euros (about 4.68 trillion won), its largest deal since the 2016 purchase of Harman. Other major groups including SK, Hyundai Motor (005380.KS), LG (003550.KS), Lotte and Hanwha (000880.KS) have gone years without a global deal, and megadeals exceeding 5 trillion won have disappeared entirely.

4. Retirement Pensions and the Trap of Choice

- Key points: The retirement pension investment landscape has broadened from deposits, insurance and funds to ETFs, TDFs, bonds and REITs, and more recently to discretionary services using robo-advisers. Yet more choices do not automatically produce a good portfolio, and many accounts hold numerous products without any investment framework. The writer proposed first setting the time remaining until retirement and the level of loss one can tolerate, then proceeding to asset allocation, product selection and periodic rebalancing. According to a Vanguard report, 59% of U.S. 401(k) participants used professionally managed asset allocation such as TDFs and balanced funds as of the end of 2024.

5. Spreads Cut to One-Third: Will Individual Government Bonds Fall Short for a Fourth Straight Month?

- Key points: According to the Korea Securities Depository, the September offering of individual investment-purpose government bonds, with subscriptions running from the 9th to the 15th, totals 230 billion won. The 10-year bond, the largest portion of the offering, carries a coupon rate of 4.415% and a spread of 0.35%, down 70 basis points (1 bp = 0.01 percentage point) from the 1.05% offered in April and May. As a result, 10-year subscriptions have fallen short of the offering amount for three consecutive months since June, when the spread was sharply reduced. However, with direct investment through retirement pension accounts (DC and IRP) now permitted for 10-year and 20-year bonds starting this month, analysts say the bonds could serve as an alternative for participants who must hold 30% of total assets in principal-guaranteed safe assets.

6. Covered Calls and Bonds Are Not Wise Bets, and Single-Stock Leverage Did Not Cause the Market Plunge

- Key points: Matthew Tuttle, chief executive of Tuttle Capital Management, said on the 8th that bonds are not currently an investment-grade target and that covered calls, whose upside is capped, are not a wise strategy either. He said the structure of selling call options forces investors to give up gains from rising share prices, and proposed put credit spreads as an alternative that secures cash flow while leaving upside potential open. He also assessed that, given the enormous level of debt, real inflation in the United States runs at 11% to 12%, making a rise in long-term rates inevitable. On the criticism that single-stock leveraged ETFs caused the sharp fall in Korean stocks, he countered that investor demand led to the product launches and that the causation had been misidentified.