As a result of examining the monthly fluctuations of the KOSPI index, July was recorded as the month with the most increases.
According to the Korean Exchange on the 6th, from 1980, the reference point for calculation, until last year, the KOSPI index rose 29 times in July out of 45 instances. It fell only 16 times. The average increase rate of the KOSPI in July was 2.1%.
The second month with the most increases was March and November, with 28 instances each. This was followed by April and December with 26 instances, and January and September with 23 instances.
Seasonal factors are cited as a background for the frequent increases of the KOSPI index in July. The performance announcements of major stocks for the second quarter (April to June) follow, and fund managers typically purchase stocks before leaving for vacation.
However, looking at the recent past, it is hard to be optimistic. In the last 10 years (2015 to 2024), the KOSPI index rose 5 times in July and fell 5 times. Especially this year, as the KOSPI index had surged by 28% until June, there is a high possibility that investors will take profits.
Lee Kyung-min, a researcher at DAISHIN SECURITIES, noted, “The KOSPI index's 12-month forward price-to-earnings ratio (PER = market capitalization ÷ net income) is 10.4 times, surpassing the average of the last three years (10.2 times), indicating a potential period for short-term profit-taking. He suggested responding to the rotation of neglected stocks such as semiconductors, automobiles, and secondary batteries rather than sectors driven by policy expectations like defense, nuclear power, and software.”