"The market rose, so why?" KOSPI takes a breather... But will it soon reach 7,000?

The KOSPI index is in a downtrend amid selling pressure led by foreign investors, just about 12 hours before Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole meeting. While the securities industry notes that caution has strengthened in the stock market, some are suggesting that the KOSPI could recover to the 7,000 range soon, citing expectations of improved corporate earnings.

As of 10:59 a.m. on the 28th, the KOSPI index stood at 6,833.20, down 79.17 points (1.15%) from the previous day. The KOSPI, which opened at 6,846.54—65.83 points (0.95%) lower than the previous session—dropped as much as 107.36 points (1.55%) to 6,805.01 early in trading before narrowing its decline to 10.59 points (0.15%) at 6,901.78. However, the downward trend is widening again. In the KOSPI market, foreign investors and institutional investors sold net amounts of 480.2 billion won and 78.7 billion won, respectively, while retail investors bought net amounts worth 25.5 billion won. Out of a total of 908 stocks, 345 rose and 513 fell.

Samsung Electronics is trading down 2.16% at 260,250 won. SK Hynix is down 1.56% at 1.703 million won. Among the top market capitalization stocks, Samsung Biologics (-4.89%), Samsung Electronics Preferred (-2.91%), and LG Energy Solution (-0.81%) are in decline.

In contrast, Samsung Electric (4.04%), Samsung Life (0.41%), and Hyundai Motor (0.38%) are rising.

The KOSDAQ index stood at 831.17, down 6.48 points (0.77%). Retail investors bought net amounts worth 193.2 billion won, while foreign investors and institutional investors sold net amounts of 164.6 billion won and 32.1 billion won, respectively. Rainbow Robotics (-3.18%), EcoPro (-3.15%), and EcoPro BM (-1.86%) are in decline.

This contrasts with the overnight rise in the New York stock market driven by Nvidia's earnings results. On the 27th (local time), the Dow Jones Industrial Average closed up 105.56 points (0.20%) at 53,569.44. The S&P 500 index closed up 55.29 points (0.72%) at 7,730.99, and the NASDAQ Composite Index closed up 411.16 points (1.57%) at 26,541.35. Nvidia announced earnings after market close on the 26th (local time) that exceeded market expectations, causing its stock to surge 8.74% in regular trading the following day.

The securities industry analyzed that expectations regarding Nvidia's earnings had already been reflected in the domestic stock market the previous day, and that psychology seeking to confirm the results of Chair Warsh's Jackson Hole speech scheduled for 11 p.m. U.S. time on this day (Korean time) is constraining buying pressure. The Jackson Hole meeting is an annual international economic policy symposium held every late August in Jackson Hole, a resort town in Wyoming, U.S., led by the Federal Reserve Bank of Kansas City. The previous day, the KOSPI index rose over 1% despite concerns about liquidity contraction following the Bank of Korea's "back-to-back" (consecutive) interest rate hike, buoyed by favorable winds from the AI industry driven by Nvidia.

The KOSPI is assessed to have improved operating profit forecasts. According to Kiwoom Securities, as of the 27th, the consensus estimates for KOSPI's 2026 and 2027 operating profits were 989.7 trillion won and 1.3143 trillion won, respectively, higher than the figures at the end of July (974.9 trillion won and 1.3109 trillion won). The leading price-to-earnings ratio (PER) is around 5.5 times, and the KOSPI Volatility Index (VKOSPI) has fallen from around 84 points at the end of July to around 53 points.

Han Ji-young, a researcher at Kiwoom Securities, said, "Whether breaking through 6,900 or 7,000 is only a difference of 100 points, but we can expect psychological momentum and the effect of breaking through resistance lines due to changes in the leading digits of the index." He added, "Even if it fails to break through 7,000 today, it is more likely that the mid-term recovery trend will extend as it succeeds in breaking through next week or sometime in September."