[R&E] KOSPI Surges 8.42%, Driven by Samsung Electronics' Dramatic Labor Agreement and Expanded Semiconductor Exports

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Global Market Brief

The New York stock market closed slightly higher yesterday, with the Dow up 0.55%, the S&P 500 up 0.17%, and the Nasdaq up 0.09%. The Philadelphia Semiconductor Index surged 4.5%, injecting positive investor sentiment across tech stocks. This was the result of a somewhat positive interpretation of US economic indicators, as weekly initial jobless claims (209,000) came in below expectations (210,000) and the May manufacturing PMI (55.3) exceeded expectations (53.8).

In particular, Nvidia (NASDAQ: NVDA) recorded FY1Q27 revenue of $81.6 billion, beating the market consensus ($78.9 billion) by 3.4% and showing an 85.2% increase year-over-year, which raised expectations across the global semiconductor sector. Meanwhile, international oil prices saw WTI fall 1.9% to drop below $100, and Brent crude closed down 2.3%. This reflects concerns over a global economic slowdown and the possibility of a deceleration in consumer spending, while the KRW/USD exchange rate rose by 11.6 won to 1,508.6 won yesterday.

Domestic Market Overview

The domestic stock market showed clear strength yesterday, with the KOSPI closing at 7,815.59 points, up 8.42%, and the KOSDAQ at 1,105.97 points, up 4.73%. Buy sidecars were triggered in both the KOSPI and KOSDAQ markets, evidencing the market's boom.

This upward trend is the result of resolving the uncertainty that had been weighing down the market, as a tentative labor agreement at Samsung Electronics (KOSPI: 005930) was dramatically reached, combined with expectations for an improvement in memory semiconductor business conditions. A positive momentum was formed across the market as the scale of net selling by foreign investors on the KOSPI shrank and net buying by institutional investors flowed in. The fact that memory export value in May 2026 (based on the 1st to 20th) recorded $14.59233 billion, a 289.9% increase year-over-year, clearly reveals the earnings turnaround of the semiconductor sector, the core driver of the domestic stock market.

Key Issues and Insights by Industry

The semiconductor and IT components sector led the market's strength based on solid earnings. In May 2026 (based on the 1st to 20th), DRAM export value recorded $7.48763 billion, a 431.5% increase year-over-year, and the export unit price also rose by 433.7%. This is the result of a steep increase in demand for high-spec products, such as High Bandwidth Memory (HBM), driven by the expansion of global AI demand.

Driven by the booming front-end industries, OLED materials specialist Duk San Neolux (KOSDAQ: 213420) reported 2026 first-quarter revenue of 72.9 billion won, a 92.1% increase year-over-year, and an operating profit of 17.1 billion won, up 72.7%. The increase in demand due to the expansion of the OLED TV and IT product markets is understood to have driven these earnings. Additionally, Soulbrain (KOSDAQ: 357780), which supplies chemical materials for semiconductor processes, also saw its first-quarter revenue increase by 25.9% year-over-year to 263.8 billion won, and its operating profit rise by 24.0% to 44.7 billion won. This indicates that the recovery of the semiconductor industry directly leads to improved profitability for key domestic materials companies, and the upward revision of Duk San Neolux's target price (60,000 won) reflects these growth expectations.

The construction and infrastructure sectors drew attention through the business initiatives and efficiency improvement efforts of individual companies. IS Dongseo (KOSPI: 010780) raised expectations for its second-half earnings by confirming the sale of a total of 1,712 units for Gyeongsan Pentahills W in June. This reveals that the stable business execution in the construction sector is laying the groundwork for continuous growth.

Rental specialist AJ Networks (KOSPI: 095570) posted solid earnings with a first-quarter operating profit of 21.9 billion won in 2026, a 39.6% increase year-over-year. This is analyzed to be mainly due to improved efficiency in the rental business and the expansion of the industrial equipment rental market. The upward revision of AJ Networks' target price to 7,000 won shows that the market highly values the growth potential of the rental industry.

The food and beverage and cosmetics sectors are showing steep growth in overseas markets. In April 2026, monthly domestic cosmetics export value exceeded $1 billion for the first time in history, and the cumulative export value for April reached $3.7 billion, up 22% year-over-year. In particular, the highest growth rate was observed in Europe. This demonstrates that the global competitiveness of K-beauty products is strengthening, and demand is expanding across various regions. The fact that companies with outstanding overseas and profit growth potential, such as Samyang Foods (KOSPI: 003230), Orion (KOSPI: 271560), APR (KOSPI: 278470), and Kolmar Korea (KOSPI: 161890), are being presented as top picks supports this trend.

Expectations for new drug development have formed in the bio healthcare sector. Initial clinical data (Period 1) of IMVT-1402 for D2T RA was disclosed, recording an ACR20 of 72.7%, significantly outperforming J&J's Nipocalimab RA Phase 2a results (ACR20 45.5%). This indicates that IMVT-1402 showed superior efficacy compared to competing drugs in the treatment of rheumatoid arthritis. In a situation where the market capitalization gap between Immunovant and HanAll Biopharma (KOSPI: 009420) widened following the failure of the batoclimab TED Phase 3 trial, the positive initial clinical data of IMVT-1402 highlights its importance as a new growth driver. Following the Period 2 clinical trial, the final 28-week topline data and PoC clinical topline data for the CLE indication are scheduled to be released in the second half of 2026.

The carbon emissions trading market was revitalized by the combination of companies' responses to environmental regulations and the trend of strengthening ESG management. In the auction of paid allocation emission allowances on May 6, the bid-to-cover ratio reached an all-time high of 219%, and the winning bid was 19,600 won per ton. This is the highest price since October 2022. Allocation emission allowances rose to 19,800 won in the spot market. This indicates that companies are actively seeking to secure carbon emission allowances and proves that investors' interest in ESG-related industry growth is increasing.

Market Signals

• Memory Semiconductor Exports: In May 2026 (based on the 1st to 20th), memory export value amounted to $14.59233 billion, a 289.9% increase year-over-year.

• Domestic Stock Market Surge: Yesterday, the KOSPI closed at 7,815.59 points, up 8.42%, and the KOSDAQ closed at 1,105.97 points, up 4.73%.

• Nvidia Earnings: FY1Q27 revenue of $81.6 billion beat the market consensus ($78.9 billion), representing an 85.2% increase year-over-year.

• Cosmetics Exports: In April 2026, monthly domestic cosmetics export value exceeded $1 billion for the first time in history.

• International Oil Price Drop: Yesterday, WTI dropped 1.9% to fall below $100, and Brent crude fell by 2.3%.

Epoch View: Investment Implications

Despite mixed global economic indicators and falling oil prices, the domestic stock market recorded a substantial increase yesterday, driven by the labor agreement at Samsung Electronics and strong semiconductor exports. This indicates that even amidst macroeconomic uncertainty, solid earnings and structural growth drivers in specific sectors can inject vitality into the overall market.

The significant increase in memory semiconductor exports and Nvidia's strong earnings clearly demonstrate that the strength of global tech stocks is translating into improved earnings for domestic semiconductor-related companies. The domestic market is highlighting the investment appeal of companies with improving earnings fundamentals, transitioning to a pattern where internal growth drivers, rather than external environments, are dictating market trends.

This content was generated by 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. Please note that this is an objective summary based on collected data, and it is not an investment solicitation or recommendation for specific stocks.