KOSPI stocks rebounded 2.14% to 6952.92 as of 10:01 AM on July 14, recovering from the previous day's 8.95% plunge to 6806.93. The rally was driven by bargain-hunting after the sharp selloff triggered by escalating US-Iran military tensions and concerns over peak memory semiconductor valuations. Institutional investors net-bought 1.62 trillion won while foreigners added 210 billion won, lifting Samsung Electronics 5.89% and SK Hynix 4.50%, though the recovery occurred against a backdrop of overnight declines in US stocks where the Dow fell 0.26%, S&P500 dropped 0.79%, and Nasdaq sank 1.55% amid geopolitical risk and semiconductor sector weakness.
KOSPI Stocks Rebound 2.14% After 8.95% Previous-Day Plunge
KOSPI opened 0.56% lower at 6769.06 on July 14 before turning positive, trading at 6952.92 as of 10:01 AM, up 2.14% from the previous close. KOSDAQ opened 0.28% lower at 797.16 and continued falling to 793.21. The previous day saw KOSPI crash 8.95% to close at 6806.93.
Institutional investors drove the rebound with net purchases of 1.62 trillion won as of 10:04 AM. Foreign investors added 210 billion won in net buying, while individual investors sold 1.8 trillion won.
Samsung Electronics surged 5.89% to 269,500 won as of 10:05 AM, leading KOSPI's advance. SK Hynix rose 4.50% to 1,928,000 won. Other semiconductor large-caps also gained: SK Square up 3.45%, Samsung Electro-Mechanics up 2.95%. In contrast, other top market-cap stocks declined: Hyundai Motor down 3.94%, LG Energy Solution down 1.67%, KB Financial down 3.06%, Samsung Biologics down 2.07%, Samsung Life down 3.07%.
US stocks fell overnight as President Donald Trump announced the resumption of a maritime blockade against Iran. The Philadelphia Semiconductor Index plunged 4.78% as NVIDIA dropped 3.52%, Micron fell 4.32%, and SanDisk tumbled 12.63%. ICE September crude oil futures surged 9.6% to $83.30 per barrel. US 10-year Treasury yields climbed to 4.62%, the highest in a month.
Seo Sang-young, managing director at Mirae Asset Securities, stated: "US stocks fell due to expanded geopolitical risks in the Middle East and weakened semiconductor investor sentiment. In late trading, Fed Governor Christopher Waller's mention of possible additional tightening if core inflation rises caused Treasury yields to widen their gains, adding to the burden."
US June CPI and Big Tech Earnings to Determine Market Direction
US June Consumer Price Index will be released tonight (Korean time). The market expects a 3.8% year-over-year increase, an improvement from May's 4.2%.
According to Hana Securities, since 2022, when CPI came in below market expectations, KOSPI's average monthly return was 4.9% with a 72% probability of gains. When CPI met expectations, average monthly return was 1.8% with a 50% gain probability. When CPI exceeded expectations, average monthly return was 0.4% with a 44% gain probability. Lee Jae-man, researcher at Hana Securities, stated: "Considering past cases, at least CPI needs to meet expectations for the likelihood of a short-term index rebound to increase."
Lee Kyung-min, researcher at Daishin Securities, stated: "If tonight's CPI confirms easing inflation pressure, it will lead to a decline and downward stabilization of rising bond yields and the dollar, supporting global stock market gains and helping calm KOSPI's sharp drop."
Q2 corporate earnings starting late this month will serve as another critical juncture. Samsung Electronics, SK Hynix, and US Big Tech companies have earnings announcements and conference calls scheduled for late July.
Lee Jae-won, researcher at Yuanta Securities, stated: "Along with US Big Tech earnings announcements, whether capital expenditure (Capex) guidance is raised will be an important factor in the market rebound. Alphabet's earnings, to be released at 5:30 AM Korean time on the 23rd, will serve as a gauge for market direction."
Fed Chair Kevin Walsh's first semi-annual congressional testimony since taking office is scheduled for July 14 (local time). Potential US-Iran ceasefire negotiations and reopening of the Strait of Hormuz are also cited as factors that could influence market direction.
FAQ
What caused KOSPI stocks to rebound on July 14?
KOSPI rebounded 2.14% to 6952.92 as of 10:01 AM on July 14 due to bargain-hunting following the previous day's 8.95% plunge. Institutional investors net-bought 1.62 trillion won and foreigners added 210 billion won, lifting semiconductor stocks like Samsung Electronics (up 5.89%) and SK Hynix (up 4.50%).
When will the US June CPI be released and why does it matter for Korean stocks?
US June CPI will be released tonight (Korean time), with the market expecting a 3.8% year-over-year increase. According to Hana Securities, since 2022, when CPI came in below expectations, KOSPI's average monthly return was 4.9% with a 72% gain probability, compared to 0.4% return and 44% probability when CPI exceeded expectations.
What Big Tech earnings are scheduled for late July?
Samsung Electronics, SK Hynix, and US Big Tech companies have Q2 earnings announcements and conference calls scheduled for late July. Alphabet's earnings will be released at 5:30 AM Korean time on the 23rd. Analysts will focus on capital expenditure (Capex) guidance to assess the market rebound potential.
