[R&E] KOSPI Surges 5.20% Amid Foreign Net Buying Inflows; Driven by Semiconductor Strength and Falling Global Oil Prices

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

Global Market Brief

The New York stock market yesterday had a positive impact on the overall market as global oil prices plummeted on news of a US-Iran nuclear deal. The Dow Jones Industrial Average rose 0.9%, the S&P 500 index rose 1.7%, and the Nasdaq Composite index rose 3.1%. In particular, the Philadelphia Semiconductor Index surged 5.45%, leading the strength of technology stocks. This reflects expectations for solid demand in the semiconductor sector. The news of the Iran nuclear deal caused oil prices to drop by about 5%, dragging West Texas Intermediate (WTI) crude oil prices down to the $80 per barrel range at one point. This contributes to improving consumer sentiment by alleviating global inflationary pressures and reducing the burden of transportation and energy-related costs. The US University of Michigan Consumer Sentiment Index for June, released yesterday, recorded 48.9, exceeding the market expectation of 46.0, but the one-year inflation expectation remained high at 4.6%. This suggests that despite the rebound in consumer sentiment, inflation concerns have not been completely resolved.

Domestic Market Overview

Yesterday, the KOSPI index surged 5.20% to 8,545.98 points, recovering the 8,500 mark. The KOSDAQ index also closed at 1,034.03 points, up 0.48%. In particular, foreign investors net bought KOSPI spot stocks for two consecutive days for the first time in a month since early May, showing a net buying dominance totaling 3.2 trillion won. This proves that investment sentiment toward the domestic stock market is improving. The exchange rate recorded 1,511.10 won in the Seoul foreign exchange market, closed at 1,515.20 won in the night market, and the NDF 1-month forward was formed at 1,513.30 won. The volatility index, VKOSPI, recorded an all-time high of 89.9%, revealing that market uncertainty remains high. In addition, a sidecar was triggered for the 26th time in the KOSPI, and for the 7th consecutive day if the KOSDAQ is included. This suggests that the domestic stock market showed an unstable pattern of repeated short-term sharp fluctuations. This trend indicates that the drop in global oil prices and the strength of US technology stocks are providing positive momentum to the domestic market, while internal volatility factors still coexist.

Key Industry Issues and Insights

Semiconductors/AI: Improvement in Memory Semiconductor Industry and Expansion of AI Infrastructure Investment

Expectations for the improvement in the memory semiconductor industry drove up the stock prices of domestic semiconductor companies. Yesterday, the stock price of SK Hynix (KOSPI: 000660) rose 6.4%, and the stock price of Samsung Electronics (KOSPI: 005930) climbed 4.5%. SK Hynix plans to triple its wafer production capacity by 2034 in response to increasing memory demand. This is a strategy to strengthen its market leadership by preemptively responding to the demand for high-performance memory. Furthermore, SK Hynix solidified its position in the next-generation AI semiconductor market by confirming the supply of memory for Nvidia's Vera CPU. Samsung Electronics is also reportedly in discussions regarding the partial production of Google's next-generation AI chip TPU I/O dies. This can enhance the competitiveness of its foundry business and contribute to achieving its goal of turning an annual profit by 2028.

The 47uF MLCC (Multi-Layer Ceramic Capacitor), commonly referred to as the core specification for AI servers, features a capacitance tens to thousands of times higher than existing general-purpose MLCCs. The fact that the BB Ratios of Taiwan's Yageo and Walsin both exceeded 1.3 indicates that the demand for AI-oriented MLCCs is surging. EMS and ODM companies have already begun securing the MLCCs needed for 2027. This trend proves that the growth of the AI industry is having a direct impact on the related components industry.

Among domestic companies, Daeduck Electronics (KOSPI: 353200) is expected to exceed the market consensus by recording second-quarter sales of 381.8 billion won (up 55.1% YoY) and an operating profit of 62 billion won (up 3,224.6% YoY). The FC-BGA (Flip Chip-Ball Grid Array) utilization rate nearing 80% and the start of mass production of large-area FC-BGA products from June are the key drivers of the earnings improvement. Daeduck Electronics announced a 213 billion won investment in May, planning to expand its production capacity by about 80% compared to its existing factories. This reveals confidence in the growth trend of the FC-BGA market and is analyzed to drive future earnings growth. Koh Young (KOSDAQ: 098460) reported first-quarter sales of 72.7 billion won (up 42.3% YoY) and an operating profit of 9.9 billion won (up 209.1% YoY), with its server sales portion expanding to 43%. The fact that its medical robot for brain surgery, 'Zeniant Cranial', obtained approvals from the US FDA and the Japanese Ministry of Health, Labour and Welfare suggests the potential for successful business diversification. Based on these achievements, Koh Young's target stock price has been revised upward to 50,000 won.

Automotive/Mobility: Reorganization of the EV Market and Hyundai Motor Group's Strategic Response

The global electric vehicle market is showing signs of reorganization due to a combination of deregulation and slowing sales. The UK significantly reduced its target for the proportion of EVs among new car sales in 2030 from the previous 80% to 50%. This reflects the market's voice that adjusting the speed of the EV transition is necessary. At the same time, the US Department of Defense strengthened its containment of China by including 188 Chinese eco-friendly vehicle and solar manufacturing companies, including BYD, on the list of 'Chinese Military-Supporting Companies'. This is analyzed to accelerate strategic changes in the finished vehicle industry along with the reorganization of the global supply chain.

In this environment, the Hyundai Motor union rejected the company's package proposal in the 11th round of negotiations and declared the final breakdown of negotiations. The union is demanding an increase of 149,600 won in base pay and the payment of 30% of the previous year's net profit as performance bonuses, and plans to hold a vote for and against a strike on the 24th. If this leads to production disruptions, it could negatively affect Hyundai Motor's short-term earnings.

On the other hand, Hyundai Motor and Kia put up a good defense by selling a total of 589,936 units (up 1.3% YoY) in the US market from January to April this year. This is an achievement made while the overall US market sales volume decreased by 6.7% and GM and Ford experienced negative growth, raising their market share to 11.8%, up 1.0%p from the previous year. In particular, the 53.2% YoY increase in hybrid (HEV) sales proves that a flexible strategy during the EV transition period was effective. Kia is accelerating the expansion of its dedicated EV lineup, aiming for its mid-size electric van PV5 to capture a 9% market share in the European eLCV (electric light commercial vehicle) market in the first quarter of 2026, and unveiling the prototype of its large electric van PV7. Ford is developing a mid-size electric pickup truck in the $30,000 range and aims to begin deliveries in 2027. Tesla's FSD (Full Self-Driving) received approval from regulators in Belgium and the Netherlands. The passage of the commercial launch date on paper for the 'Cybercab' robotaxi as May 29 heightens expectations for the commercialization of autonomous driving technology.

Steel/Raw Materials: China's Steel Price Freeze and Concerns Over Global Oversupply

The global steel market is showing a pattern of deepening oversupply concerns as China's production capacity expansion and price freeze coincide. China's Baoshan Iron & Steel froze the prices of most of its major domestic flat steel products for July, which foreshadows intensified price competition in the steel market in the second half of the year. However, the fact that prices for grain-oriented electrical steel were additionally raised by 300 yuan ($44.3) per ton, and hot-rolled prices were raised for four consecutive months from March to June, bringing the total combined increase to 500 yuan, suggests that demand for certain high-value-added product groups remains solid. China's average daily hot metal production per week is maintaining a high production level of about 2.42 million tons. As of June 12, the fact that 60% of China's blast furnace steel mills recorded a surplus due to improved profitability reveals that Chinese steelmakers still have sufficient capacity to expand supply.

The OECD projected global steel demand growth at 34 million tons in 2026, while presenting the possibility of global production capacity expanding by up to 139 million tons. Accordingly, global steel oversupply is expected to widen from 640 million tons in 2025 to 745 million tons in 2028. This is highly likely to act as an intensifying factor in price competition and a worsening export environment for the domestic steel industry. Domestically, with the enforcement of the K-Steel Act, the criteria for evaluating the competitiveness of the domestic steel industry will shift to focus on carbon efficiency. This means that a transition to eco-friendly production methods is urgent, and it is analyzed that the expansion of related investments will be inevitable.

SeAH Steel (KOSPI: 306200) raised the prices of all steel pipe products and reduced the product discount rate by 3% for shipments starting July 1. This is a move to reflect cost burdens and seek profitability improvement. POSCO International (KOSPI: 047050) signed a memorandum of understanding (MOU) with the Mongolian state-owned mining enterprise Erdenes Mongol for the production of critical minerals and the development of a technology complex. Considering that Erdenes Mongol holds 67 mining rights and 17 exploration rights, this is judged to contribute to stabilizing the critical mineral supply chain and securing future growth engines. Meanwhile, the family of Korea Zinc Chairman Choi Yun-beom is undergoing a special tax investigation by the National Tax Service on suspicions of illegal fund leaks in the 500 billion won range. This is a factor that heightens uncertainties related to corporate governance risks.

Aviation/Energy: Plunge in Global Oil Prices and Expectations for Aviation Industry Recovery

The international energy market faced significant changes due to the easing of geopolitical risks in the Middle East. Global oil prices plummeted as US President Trump announced the conclusion of a nuclear deal with Iran and declared the scheduled opening of the Strait of Hormuz on the 19th. The price of West Texas Intermediate (WTI) crude oil closed at $80.75, down 4.87% from the previous day, and Brent crude also fell 4.76% to $83.17. European natural gas prices also plunged more than 9%. This is expected to have a positive impact on the overall global economy by significantly reducing the burden of energy costs.

This drop in oil prices has a decisive impact on improving the profitability of the aviation sector. Korean Air (KOSPI: 003490) has a high possibility of turning to a separate operating profit (estimated at 65 billion won) as long-haul route fares and cargo fares rose by more than 30% and 40% YoY, respectively, in the second quarter. Air cargo fares in the second quarter of 2026 are scheduled to record the highest level since COVID-19. It is analyzed that this will accelerate the earnings turnaround of airlines, as the recovery of passenger demand and the alleviation of the high oil price burden act in combination.

SK Telecom (KOSPI: 017670) jointly created a $500 million (approximately 760 billion won) 'IOWN AI Fund' with Japan's NTT and Chunghwa Telecom. It also plans to collaborate with Nvidia to operate a GW-class data center 'AI Factory' in South Korea in 2027. This is a strategy to secure future growth engines through the expansion of AI business utilizing communication infrastructure. Nvidia plans to develop a dedicated GPU chip for 6G communication base station wireless antennas. Such movements suggest the possibility of creating new business models through the advancement of communication services and the convergence of AI technology.

In the renewable energy sector, US solar power generation in May recorded 45.5 TWh, surpassing coal power generation (43.4 TWh) for the first time ever on a monthly basis. The proportion of solar power generation reached 13%. This proves the acceleration of the energy transition and the expansion of renewable energy generation. Indonesia aims to expand its current 1.5 GW of solar facilities to 100 GW by 2028, and plans to prioritize the construction of 17 GW of solar power generation and 33 GW of BESS (Battery Energy Storage System). Amid this global trend, Hyvision System (KOSDAQ: 126700) is accelerating sales growth in the secondary battery sector by revising the supply contract amount for ESS battery pack assembly equipment upward from 19.2 billion won to 95 billion won. Sebang Global Battery (KOSPI: 004490) will carry out a 100 billion won capital increase for its subsidiary Sebang Lithium Battery, and plans to invest a total of 150 billion won in the production of high-voltage power ESS battery modules in North America. This indicates that domestic companies are establishing core supply chains in response to the growth trend of the global ESS market.

Market Signals

• Domestic Stock Market Volatility: Yesterday, a sidecar was triggered for the 26th time in the KOSPI, and for the 7th consecutive day if the KOSDAQ is included. The VKOSPI recorded an all-time high of 89.9%, suggesting that market uncertainty remains high.

• Automotive Electronics/Robotics Components: DKT (KOSDAQ: 290550) recorded first-quarter sales of 115.6 billion won (up 34% YoY) and an operating profit of 8.8 billion won (up 260% YoY). It drives growth in the automotive electronics and robotics sectors by securing three global finished vehicle manufacturers, one electric vehicle company, and one domestic and one overseas robot company as additional customers.

• Platform/Contents: Naver (KOSPI: 035420) offers a 20% refund in Onnuri Gift Certificates when purchasing Galaxy and Bespoke products on its shopping platform, and signed a business agreement with Krafton (KOSPI: 259960) to expand the PUBG esports ecosystem. The global test of Krafton's 'Project ZETA' begins on the 25th, forming momentum for a new release.

• Pharmaceuticals/Biotech: Hyundai Pharm (KOSPI: 004310) hit the upper limit and Withers Pharm (KOSDAQ: 330350) rose 22.8%, showing individual strength in some domestic pharmaceutical and biotech stocks. This is analyzed as a reflection of specific events or expectations.

• Financial Market Pressure: COFIX has risen for two consecutive months, and bank credit loans surged by 1.6 trillion won in ten days, with the upper end of interest rates surpassing 6%. This suggests an increase in the household loan burden and liquidity pressure in the financial market.

Epoch View: Investment Implications

Yesterday's strong rebound in the domestic stock market is the result of combining two core drivers: the improvement in the global semiconductor industry and the drop in global oil prices following the easing of geopolitical risks. The stabilization of energy prices resulting from the conclusion of the US-Iran nuclear deal has reduced the inflation burden and brought about cost-saving effects across the transportation and manufacturing sectors. This has led to expectations of improved profitability for transportation companies like Korean Air. At the same time, along with the development of AI technology, the demand for high-performance memory and related components is surging, driving the growth of domestic leading semiconductor stocks such as Samsung Electronics and SK Hynix, as well as downstream industry companies like Daeduck Electronics and Koh Young. However, the high volatility of the domestic stock market, concerns about oversupply in some industries, and the strike risk of the Hyundai Motor union are areas that still require vigilance. The market continues to react sensitively to macro changes, and it is judged that a selective investment approach based on structural changes in key industries and individual corporate narratives remains effective.

This content was generated by News Epoch's proprietary AI algorithm, which tracks and analyzes public data from research centers of major domestic securities firms and global financial media in real-time. It is an objective summary based on the collected data and clarifies that it is not a solicitation or recommendation for investment in specific stocks.