The NXT pre-market is trading up over 2% ahead of the opening of Korea’s regular session, driven by a rally in US semiconductor stocks. With memory chip stocks such as Micron surging on US markets and KOSPI 200 night futures showing strength, buying has continued, centered on Samsung Electronics (005930.KS) and SK hynix (000660.KS).
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According to Nextrade, the pre-market was up 2.35% as of 8:05 a.m. Friday. Samsung Electronics rose 4.83% to 380,000 won, setting a new all-time high. SK hynix was trading at 2.807 million won, up 4.54%. During the session, it climbed as high as 2.819 million won, setting a record. SK Square (402340.KS) was up 6.76% at 1.815 million won. Samsung Electro-Mechanics (009150.KS) (2.27%), Samsung Life Insurance (032830.KS) (3.73%), Samsung C&T (028260.KS) (4.63%), Hyundai Motor (005380.KS) (1.16%) and HD Hyundai Heavy Industries (329180.KS) (1.17%) also gained.
Overnight, US markets were led higher by semiconductor stocks. The Dow Jones Industrial Average rose 0.1%, the Standard & Poor’s 500 gained 1.1%, and the Nasdaq Composite climbed 1.9%. Nvidia rose 2.9% and Micron surged 8.7%. The gains in semiconductor stocks were attributed to a US government-led announcement of cooperation between Apple and Intel, expectations of strong memory prices, and supply-demand concentration ahead of the simultaneous expiration of futures and options.
Korea’s markets are also expected to open higher, led by semiconductors. The US Philadelphia Semiconductor Index surged more than 6%, while KOSPI 200 night futures showed strength of over 3%. The fact that foreign investors swung to net buying of more than 1.3 trillion won the previous day, concentrating purchases in the semiconductor and IT hardware sectors, is also favorable in terms of supply and demand.
However, there is also profit-taking pressure after the KOSPI broke through 9,000 points the previous day. With the KOSPI surging more than 11% this week, led by the semiconductor and IT hardware sectors, short-term fatigue has also grown. Analysts say that even if semiconductors continue their dominant run during the session, sector rotation could emerge toward shipbuilding, defense, securities, power equipment and bio.
“Today, Korea’s markets are expected to open with a continued rise in the semiconductor-dominant pattern, following the previous day, helped by the US Philadelphia Semiconductor Index’s surge of more than 6% and KOSPI 200 night futures’ strength of over 3%,” said Han Ji-young, an analyst at Kiwoom Securities. She added, “During the session, as the desire for profit-taking following the KOSPI’s breakthrough of 9,000 points combines with the speed burden from the short-term spike, the market could shift to a sector rotation pattern with limited momentum for further gains.”
Meanwhile, interpretations of the June Federal Open Market Committee (FOMC) results have diverged across markets. In the foreign exchange market, the dollar continued to strengthen, but the US 10-year yield fell to 4.44% and the stock market rose. The market is expected to maintain high volatility for some time over the direction of Federal Reserve policy, which will change under the new chair. However, with West Texas Intermediate (WTI) crude falling to around $75, the easing of upward inflation pressure is cited as a factor limiting downside in the stock market.
