Last week (June 30 to July 4), the KOSPI index briefly surpassed the 3110 mark. A significant factor was the passing of the amendment to the Commercial Code, which includes the 'duty of loyalty to shareholders' on the 3rd. Expectations that the Korea Discount (an undervaluation of the Korean stock market) would be resolved heated investor sentiment.
However, in a market that surged in a short period, profit-taking movements were also observed. On the 4th, the KOSPI index closed at 3054.28, down 1.99% from the previous trading day, surrendering the 3100 mark. Na Jeong-hwan, a researcher at NH Investment & Securities, noted, "The rising anxiety ahead of the expiration of the U.S. reciprocal tariff suspension is also a factor for profit-taking."
This week (July 7 to 11), there is advice to closely watch the revived tariff risks. This is because the date for the suspended mutual tariff negotiations is approaching. On the 9th, the reciprocal tariff suspension period granted by the Donald Trump administration will expire. In Korea, a 25% reciprocal tariff has been announced.
President Trump stated that he will send a trade letter outlining reciprocal tariff rates to 12 countries on the 7th (local time). He did not specify which countries the letter would pertain to. Given the interpreted pressure message, it is possible that each country will hurry to negotiate with the U.S. In Korea, it is reported that Yeo Han-koo, head of the Trade Negotiation Headquarters of the Ministry of Trade, Industry and Energy, shared opinions on the Korea-U.S. tariff negotiations over the weekend.
Lee Kyung-min, a researcher at DAISHIN SECURITIES, analyzed, "President Trump's tendencies are difficult to predict until the end of negotiations," and noted, "Negotiations with major trading partners like Japan and the European Union (EU), who are keen to protect core interests, are delayed, and the Lee Jae-myung government doesn't feel an urgency either."
The researcher continued, "Responding according to scenarios is more important than predicting at this point," adding, "Another 'TACO (Trump Always Chickens Out) trade' opportunity is expected." The TACO trade refers to the pattern of applying the threat of imposing tariffs by President Trump and then backing down repeatedly.
Yoo Myung-gan, a researcher at Mirae Asset Securities, said, "We need to be mindful of the increased stock price volatility around the expiration date of the reciprocal tariff suspension," and explained, "Stocks with solid second-quarter profit momentum or those that have become more attractive in valuation due to lower first-half stock price increases will benefit."
The second-quarter earnings announcement of Samsung Electronics, a leading stock in the KOSPI, on the 8th is also noteworthy. Samsung Electronics' stock price rose for three consecutive trading days from the 1st to the 3rd of this month, reaching the year's highest price (63,800 won). However, it is evaluated that the upward trend is somewhat weak compared to the hot run of the domestic stock market since the new government took office.
The outlook for earnings is not bright. According to financial information firm FnGuide, the consensus for Samsung Electronics' second-quarter earnings this year (average forecast) is 76.5535 trillion won in sales and 6.4444 trillion won in operating profit. Compared to the same period last year, sales increased by 3.36%, but operating profit decreased by 38.30%. Goldman Sachs and JP Morgan have also predicted that Samsung Electronics' second-quarter operating profit will fall short of expectations.
Lee Kyung-min added, "The direction of the KOSPI will be determined by improving the outlook for Samsung Electronics depending on the recent strong semiconductor exports and price cycle recovery," and said, "Although there are not great expectations for improvement compared to past earnings, uncertainty is expected to be resolved after confirming the results."
The Monetary Policy Committee meeting held on the 10th is also an event to watch closely. The market predicts that the committee will freeze the July base rate at 2.5%.