Recently, the KOSPI index surpassed the 2720 level, reaching a new high, while cautious views in the securities industry suggest that further increases may only be possible after a short-term adjustment phase due to macroeconomic instability.
According to the Korea Exchange on the 3rd, the KOSPI index closed at 2698.97 on the 2nd. On May 29, it finished at 2720.64, more than 1.89% higher than the previous trading day, setting a new record high.
News that the Trump administration's tariff policy might face restrictions led to a surge in shares of companies benefiting from election policies, pushing stock prices upward. Additionally, the Bank of Korea's decision to lower the base rate and NVIDIA's strong performance also had a positive impact.
However, within the securities industry, there are cautious opinions that the domestic stock market may experience a short-term adjustment phase in the second half of the year due to the lack of clear upward momentum in the macroeconomic environment.
Jo Byeong-hyeon, a researcher at DAOL Investment & Securities, noted in a report on the outlook for the domestic stock market in the second half on the 2nd, "While improvements in sentiment related to Trump tariffs and domestic policy expectations create a favorable atmosphere, it must be remembered that there is fundamentally a lack of macroeconomic fundamentals."
According to the recently released monthly trends from the Ministry of Trade, Industry and Energy, Korea's exports in May decreased by 1.3% compared to the same period last year, entering negative territory for the first time in four months.
Among key products, semiconductors performed well, recording the highest level ever for May, but automotive exports plummeted by over 30%. It is interpreted that the impact of Trump tariffs on exports from both the U.S. and China has begun to be significantly reflected.
In addition, concerns about a further slowdown in Korea's export cycle, uncertainties in trade negotiations, and uncertainties related to the monetary policy of the Federal Reserve could overlap in the third quarter (July to September).
Jo stated, "Despite improvements in sentiment related to Trump tariffs and domestic policy expectations, the lack of macroeconomic fundamentals increases the likelihood of volatility due to external variables," and he projected that until the third quarter, a highly volatile sideways market could form rather than a trend of steady increases.
However, Jo predicted that after the sideways adjustment in the third quarter, a continuous recovery phase in the economy would unfold in the fourth quarter (October to December). Amid speculation that the Fed may shift its monetary policy around September, it is explained that the Trump administration's tariff policy will become clearer, easing uncertainties. He believes that the economic cycle will also reach a low point and seek a rebound.
Specifically, from the end of the second quarter to the beginning of the third quarter, it is expected that existing leading sectors such as shipbuilding, defense, power equipment, and consumer goods will have a significant driving force in the market. However, since signs of a slowdown in macro indicators are likely to become apparent in the third quarter and market uncertainties may also increase, defensive investment strategies such as dividends and value-up are suggested to be effective.
Jo suggested paying attention to the information technology (IT) sector as expectations for economic recovery in the fourth quarter are anticipated to rise. He presented the KOSPI index range for the second half of the year as between 2440 and 2860.