Stock Market Outlook: July KOSPI Direction... Samsung Electronics and SK Hynix Profit Forecasts Are Key

The domestic stock market is expected to digest the sharp decline from the previous week, determining the direction of the July market. On June 26, the KOSPI and KOSDAQ fell sharply by 5.8% and 4.1%, respectively, with the second circuit breaker triggered. Despite factors like Apple's price increase, delayed OpenAI IPO, and Hormuz Strait uncertainty, the market views the decline as due to semiconductor positioning. Recent KOSPI gains depend heavily on Samsung Electronics and SK Hynix, whose market caps now exceed 60%. Volatility has increased with leveraged ETFs and passive funds, leading to significant sell pressure from minor negative events. The focus on these two stocks has diverted momentum funds from KOSDAQ, causing it to lag. While fundamentals remain stable, the second-quarter results will be crucial, as improved semiconductor profits could signal a correction, but underperformance could increase concerns about the semiconductor-focused market trend. High interest rates also need consideration, as oil prices have dropped to pre-war levels but U.S. 10-year Treasury yields remain high.