[R&E] New Year's Stock Market Prepares for Another Leap Forward Amid Tailwinds from Semiconductors and Exports

[R&E: Research & Epoch]
This is News Epoch's signature report that opens a new era of investment (Epoch) by analyzing securities firms' research.

Market Overview: Key Indicators and Trends

On the previous trading day, the domestic stock market closed with the KOSPI falling by -0.15% to 4214.17pt and the KOSDAQ dropping by -0.76% to 925.47pt, driven by net selling from foreign and institutional investors. In particular, investor sentiment for secondary batteries contracted on news of a reduced supply contract with Tesla, leading the hardware sector's return rate to rank near the bottom. Conversely, the media sector showed strength, rising by +2.88%.

The U.S. stock market closed lower, extending its weakness for the fourth consecutive trading day amid year-end portfolio rebalancing and the emergence of profit-taking sales. The Dow Jones fell by -0.63%, the S&P 500 dropped by -0.74%, and the NASDAQ declined by -0.76%. While all sectors fell, the real estate and materials sectors experienced the steepest declines.

In the bond market, U.S. weekly initial jobless claims recorded a larger-than-expected decrease to 199,000, confirming the resilience of the U.S. labor market, which led to a slight increase in U.S. Treasury yields, primarily in the mid-to-long-term segments. The 10-year U.S. Treasury yield showed signs of rebounding around the 4.1% level. The KRW/USD exchange rate rose by +5.0 won to 1,444.6 won due to year-end settlement demand and upward pressure on the dollar driven by expectations of the Fed's cautious interest rate adjustments.

Key Industry Issues and Debates

The semiconductor market is expected to record overwhelming profit growth in 2026, driving the rise of the KOSPI. According to Meritz Securities, the December NAND contract price once again demonstrated an upward trend based on limited supply capacity, while robust demand across various applications is aggravating the market imbalance. The server DRAM contract price rose by 88~93% compared to the average contract price in Q3 2025, and the Q4 2025 contract price increased by 53% quarter-on-quarter. The PC DRAM contract price was also hiked by 38~43% in Q4 2025 compared to the previous quarter, and the 8GB DDR4 contract price recorded $46.5, up 18~23% month-on-month. Shinhan Securities reported that Samsung Electronics plans to expand HBM capacity by 50% in 2026 and is focusing on HBM4. Yuanta Securities analyzed that large-cap memory stocks (Samsung Electronics +122.6% YoY, SK Hynix +280.3% YoY) and the AI ASIC market outperformed in 2025, and Samsung Electronics' commodity DRAM surpassed $9 for the first time. In addition, the U.S. Department of Commerce's easing of restrictions on bringing equipment into Samsung Electronics and SK Hynix's semiconductor plants in China is also expected to act as a positive factor. Kiwoom Securities projected that following the Q4 earnings season, semiconductor stocks such as Samsung Electronics and SK Hynix will secure further upward revisions to profit estimates and CAPEX investment momentum from U.S. M7 hyperscalers, likely renewing their monthly highs.

South Korea's December exports increased by 13.4% year-on-year, recording a positive surprise for the fourth consecutive month and laying the groundwork for an upward revision of the 2026 economic growth rate. Meritz Securities stated that December exports showed stronger-than-expected performance, growing +13.4% year-on-year and +9.4% on a daily average basis. Notably, semiconductor exports accounted for 29.8% of total exports, raising the possibility of exceeding 30% in 2026. Consequently, Meritz Securities revised its 2026 economic growth forecast for South Korea upward from 2.0% to 2.2%. Shinhan Securities also analyzed that semiconductors led exports in 2025, confirming an overall export growth trend across major countries. Kyobo Securities mentioned that the robust domestic December exports could act as a bearish factor for the domestic bond market.

In the nickel and secondary battery sectors, expectations and concerns over the 2026 growth cycle intersect alongside individual corporate issues. According to Meritz Securities, Sphere (347700) announced on the last day of 2025 its acquisition of a 10% stake in EII (Excelsior International Investment), which operates and sells products for an Indonesian nickel smelter owned by the global Tier 1 nickel mineral group NIC, raising expectations for business expansion in 2026. On the other hand, Kiwoom Securities projected that secondary battery materials company Chunbo's Q4 2025 earnings would record sales of 33.4 billion won (+9% QoQ, +5% YoY) and operating profit of 900 million won (+69% QoQ, -63% YoY), falling short of the market consensus of 1.5 billion won, and suggested maintaining a conservative perspective for now. SK Securities indicated that it is time to respond to market environment changes, noting discussions on an additional 1 million won trade-in subsidy to counter the EV chasm phenomenon. Meanwhile, Hana Securities forecast that POSCO Holdings' Q4 2025 earnings will record sales of 16.4 trillion won (-7.5% YoY, -4.6% QoQ) and operating profit of 404.3 billion won (+323.9% YoY, -36.7% QoQ, falling short of the consensus of 523.1 billion won) due to narrowing steel spreads and decreased operating profits from domestic subsidiaries. However, they analyzed that an earnings improvement could be expected in 2026, showing mixed views within the securities industry.

Today's Research Highlights

1. Meritz Securities - Sphere (347700): Concluded 2025 by announcing the acquisition of a 10% stake in EII, an Indonesian nickel smelter owned by global nickel mineral group NIC. This is expected to have a positive impact on business expansion in 2026.

2. Shinhan Securities - Domestic Equity Strategy: The domestic stock market in Q1 is equipped with an environment for a restart, awaiting the resolution and verification of doubts regarding corporate earnings. The KOSPI band was suggested at 4,100~4,700pt, with a recommendation to pay attention to export stocks, stocks with earnings momentum, and policy-responsive stocks.

3. Meritz Securities - South Korea's December Exports: December exports increased by 13.4% year-on-year, and daily average exports grew by 9.4%, recording a positive surprise for the fourth consecutive month. In particular, semiconductor exports accounted for 29.8% of total exports, raising the possibility of exceeding 30% in 2026. Accordingly, the 2026 economic growth forecast for South Korea was revised upward from 2.0% to 2.2%.

4. Yuanta Securities - Semiconductor January Preview: In the 2025 semiconductor market, memory semiconductors and the AI ASIC market outperformed, while Samsung Electronics' stock price surged by 122.6% YoY and SK Hynix by 280.3%. We expect the strength of large-cap memory stocks and expanding interest in AI ASICs to continue in January 2026.

Epoch View: Investment Implications

The domestic stock market in the new year of 2026 is preparing for another leap forward, bolstered by a distinct recovery in the semiconductor industry and robust trends in South Korean exports, despite the lower close of the U.S. stock market on the previous trading day. Semiconductors, in particular, are expected to see overwhelming profit growth and are identified as the core driver that will lead the KOSPI's rise. The nickel and secondary battery sectors require a cautious approach toward overall market environment changes alongside positive news from individual companies.

As the domestic stock market in Q1 2026 is anticipated to explore its direction through the resolution and verification of earnings doubts, investors should maintain continued interest in semiconductors and export-related sectors. Furthermore, it is judged that a strategy of selecting stocks with clear earnings improvement momentum and paying attention to sectors poised to benefit from government policy support will be effective.

This content was generated by News Epoch's proprietary AI algorithm, which tracks data from major domestic securities firms in real-time.