KOSPI Surpasses 6,500, Hits Record High Fueled by Semiconductor Surge

South Korea's benchmark stock market index, KOSPI, has surpassed the 6,500 mark during intraday trading, reaching a new all-time high for the first time, driven by robust performance from semiconductor companies. The KOSPI index has climbed to its highest level in history.

The primary driver behind KOSPI's ascent was the improving outlook for the semiconductor industry. Positive indicators, such as a 182.5% year-on-year increase in semiconductor exports in April, were rapidly reflected in earnings expectations. SK Hynix reported first-quarter results on April 23rd, with revenue of 52.6 trillion won and an operating profit of 37.6 trillion won. Sectors centered around AI infrastructure, particularly semiconductors, led the market. The IT hardware sector rose 27.8% weekly, IT appliances gained 24.9%, and the shipbuilding sector recorded a weekly increase of over 15%. Last week, KOSPI closed at 6475.63, up 238.71 points (4.58%) from the previous week. The closing price on April 22nd was 6417.93, and on April 23rd, it surged to 6557.76 intraday, breaking the 6,500 level.

This week, the market is closely watching the US Federal Open Market Committee (FOMC) meeting and oil price fluctuations. The FOMC meeting is scheduled for April 28-29, and the committee's statement and Federal Reserve Chair Powell's remarks are expected to provide clues on future interest rate policy direction. International oil prices, with their growing impact on inflation, could lead to adjustments in interest rate cut expectations depending on the Fed's assessment. If oil prices stabilize, the possibility of resuming interest rate cuts in the second half of the year remains open, which could positively impact the stock market.

Geopolitical risks in the Middle East have seen a short-term easing. Although negotiations between the US and Iran have not materialized, US President Donald Trump's announcement of a ceasefire extension has led to an assessment that risk escalation is limited. The possibility of the Strait of Hormuz being blockaded or incidents involving ship seizures continue to exert upward pressure on oil prices sporadically. The market may react sensitively to the interplay between geopolitical risks and inflation variables.

Currently, the stock market is experiencing widening differentiation among individual stocks. The cross-sectional volatility (CSV) of KOSPI 200 is around 20%. The semiconductor sector accounts for over 45% of KOSPI's market capitalization, leading to extreme concentration in the index. Simultaneously, within less-performing sectors, selective rotation is occurring, focusing on stocks with solid earnings. Market analysis suggests that a stock selection strategy is more effective than chasing the index. Advice indicates that maintaining a core portfolio of leading stocks in semiconductors, power generation equipment, nuclear power, and defense, whose earnings are validated, is advisable. Additionally, selectively investing in stocks with confirmed earnings within sectors showing significant improvements in return on equity (ROE) could be a viable approach. KOSPI currently displays a complex trend that is difficult to definitively categorize as overvalued or undervalued. Investor focus is shifting towards the future market direction.