[R&E] KOSPI Plummets After Touching 8,000 Level; BGF Retail and Neotis Earnings Improvement Highlighted Amid Heightened Caution Over US Interest Rate Hikes

[Correction Notice] This article has been rewritten and republished with the same data according to the updated editorial guide.

[R&E: Research & Epoch] This is News Epoch's signature report that forecasts a new era of investment by comprehensively analyzing global financial data and domestic securities firm research.

Global Market Brief

The New York stock market fell across the board the previous day in the aftermath of a surge in US Treasury yields. In particular, the 10-year US Treasury yield surged 13bp to 4.6%, and the 30-year yield also exceeded 5.1%, raising widespread market caution about interest rate hikes. This was due to the Chicago Mercantile Exchange (CME) FedWatch's forecast for the possibility of a December benchmark interest rate hike jumping from 39% the previous day to 51%.

The technology-heavy NASDAQ fell 1.54%, and the Philadelphia Semiconductor Index dropped 4.02%. Major semiconductor companies such as Nvidia (NASDAQ: NVDA), AMD (NASDAQ: AMD), and Intel (NASDAQ: INTC) plummeted, leading the market's decline.

On the other hand, international oil prices for West Texas Intermediate (WTI) rose 4.2% to $105.4 due to concerns over a prolonged closure of the Strait of Hormuz. The Japanese economy recorded an annualized growth rate of 2.1% in the first quarter, proving a solid trend by exceeding the 1.7% average estimate of analysts surveyed by Reuters.

Domestic Market Overview

On the previous trading day, the domestic stock market saw the KOSPI surpass the 8,000 level for the first time in history during early trading, but sell-offs soon poured in, eventually closing down 6.12% at 7,493.18 points. The KOSDAQ also showed a synchronized weakness, dropping 5.14% to record 1,129.82 points.

Foreigners continued net selling for seven consecutive trading days in the KOSPI market, dumping 1.8 trillion won worth of spot stocks, particularly centered on the electrical and electronic sectors. It is analyzed that concerns over US interest rate hikes and shrinking global semiconductor investment sentiment directly impacted the domestic stock market.

The dollar-won exchange rate closed up 5.4 won at 1,497.6 won, approaching the 1,500 won mark and exacerbating investment uncertainty. Individual investors net bought 1.9 trillion won, appearing to respond to perceptions of excessive decline.

Key Industry Issues and Insights

Semiconductor Materials, Parts, and Equipment Companies Prove Independent Growth Amid Industry Concerns

The global semiconductor market showed a mixed trend. Although investment sentiment weakened as major technology stocks fell in the New York stock market the previous day, semiconductor equipment and materials company Union Tool (TYO: 6408) raised its annual guidance by 30% after seeing a 42.6% year-on-year increase in first-quarter revenue and a 60.4% jump in operating profit. Topoint (TPEX: 8021) also recorded a 51.0% surge in first-quarter revenue and a 272.7% leap in operating profit, planning to expand production capacity by more than 30%. This proves the solid growth in specific fields driven by the transition to advanced processes and the demand for high-performance computing.

In South Korea, SK Hynix recorded strong performance due to the memory supercycle, but the union at Samsung Electronics warned of a general strike, heightening supply chain uncertainties. Despite these circumstances, domestic semiconductor materials and parts companies revealed solid earnings. MK Electron (KOSDAQ: 033160) reported a first-quarter operating profit of 8.6 billion won, an increase of 136.7% year-on-year, and also raised its annual profit estimate for the semiconductor division by 25%.

Korea Circuit (KOSPI: 007810) saw its first-quarter revenue increase by 18.4% year-on-year, successfully turning a profit in operating income. The company announced a 99.3 billion won new facility investment to respond to robust sales in memory modules and SSDs. Neotis (KOSDAQ: 085910) also experienced a 36.4% rise in first-quarter operating profit and plans to expand its production capacity to 70 million units per year by raising 10 billion won in facility funds through a paid-in capital increase. It is evaluated that the technological competitiveness and market responsiveness of domestic materials, parts, and equipment companies are being further strengthened.

Differentiated Rally of Consumer Goods Breaking Through Domestic Demand Slowdown

In the consumer goods sector, companies that showed differentiated growth despite concerns over slowing domestic consumption drew attention. BGF Retail (KOSPI: 282330), which operates the convenience store brand 'CU', recorded a first-quarter operating profit of 38.1 billion won, surging 68.4% year-on-year. The figure significantly exceeded market expectations, with a 2.7% growth rate for existing stores and a 115.0% increase in daily sales for new stores acting as core drivers.

Benefiting from the increase in foreign tourists, Global Tax Free (KOSDAQ: 204620) also renewed its highest quarterly performance in history with first-quarter revenue increasing by 21.2% and operating profit by 12.8% year-on-year. This achievement was reached despite the gap in beauty and plastic surgery tax refund revenue, which accounted for about 20% of its average sales in 2025. The full implementation of Japan's post-purchase tax refund system in November 2026 is expected to provide additional growth momentum. Amid structural changes such as shifting consumption patterns after the endemic phase and expanded inflows of foreign tourists, the solid growth potential of specific business models is being highlighted.

Defense and Shipbuilding Industries See Visible Opportunities to Enter US Supply Chain

In the defense and shipbuilding sectors, the disclosure of the US Navy's mid-to-long-term construction plan has signaled new opportunities for domestic companies. The US Navy officially acknowledged its lack of domestic shipbuilding capacity and presented a plan to procure 75 battle force ships over the next five years and 369 over the next 30 years. In this process, it requested allied shipyards to allow the overseas construction of auxiliary ships and the overseas manufacturing of some non-sensitive modules for surface combatants.

Particularly for auxiliary ships, it is reviewing a model in which allied shipyards perform lead construction and follow-on ships can be transferred to US domestic shipyards, while formalizing the direction of rebuilding its industrial base through overseas shipbuilders' local investment in the US and production technology transfer. This is significant in that it has opened up the possibility of the Korean shipbuilding industry being integrated into the US defense supply chain.

Domestically, policy support is continuing, such as the banking sector deciding to inject 1 trillion won into partner companies to support the export supply chain of the shipbuilding industry. Hanwha Aerospace demonstrated its technological prowess by exhibiting the integrated performance of manned and unmanned complex combat systems in Romania, and revealed progress in its aerospace business by stating that 70-90% of the stage assembly of the 5th Nuri rocket has been completed.

Future Car Market Sees Intersection of Deregulation and Support Measures

The future car market witnessed an intersection of changes in regulations and support measures. The US Environmental Protection Agency proposed delaying the implementation of regulations to reduce pollutant emissions from passenger cars and medium-duty commercial vehicles by two years. Conversely, the state government of California plans to inject over $1 billion by 2030 by introducing a rebate program ranging from $7,500 up to $120,000 per vehicle to expand the deployment of electric medium- and heavy-duty commercial vehicles.

The South Korean government revealed its intention to protect its domestic industry by increasing the weight of domestic supply chain contributions in the criteria for calculating electric vehicle subsidies. In addition, it confirmed an injection of 18 trillion won in policy finance for the transition to future cars. Amid these policy changes, the amount of loaded battery anode materials in the first quarter increased by 9.7% year-on-year, particularly growing by 20.8% in markets outside of China. Even amid the pace adjustment in the global electric vehicle market, the restructuring of the supply chain and growth momentum in specific regions continue to trend.

Market Signals

• Domestic Stock Market Plunges: On the previous trading day, the KOSPI broke through the 8,000 mark during intraday trading before eventually plummeting 6.12% to close at 7,493.18 points.

• US Treasury Yields Rise: The 10-year US Treasury yield surged 13bp to 4.6%, and the 30-year yield exceeded 5.1%.

• Dollar-Won Exchange Rate: The dollar-won exchange rate closed up 5.4 won at 1,497.6 won, approaching the 1,500 won level.

• BGF Retail's Strong Performance: Recorded a first-quarter operating profit of 38.1 billion won, an increase of 68.4% year-on-year, exceeding market expectations.

• MK Electron's Profit Surges: First-quarter separate operating profit reached 8.6 billion won, jumping 136.7% year-on-year, and raised the annual profit estimate for the semiconductor division by 25%.

Epoch View: Investment Implications

Global interest rate hike pressures and tech stock corrections are factors that expand market volatility in the short term. However, changes in the US Navy's ship construction plans, the reorganization of domestic and overseas eco-friendly vehicle subsidy policies, and domestic semiconductor materials and consumer goods companies that have recorded solid earnings reveal points where structural growth opportunities can be sought even amid macroeconomic uncertainties. It is judged that each company's ability to respond to external environmental changes and the direction of government policies will accelerate the process of sorting the wheat from the chaff in the market.

This content was generated through News Epoch's proprietary AI algorithm, which tracks and analyzes public data from major domestic securities firm research centers and global financial media in real time.