Samsung, SK Hynix Face ‘Super Week’ as Earnings, Fed Minutes Test Kospi

NH Investment & Securities sees the Kospi in a 7,200-9,000 range

Samsung Electronics to report earnings on July 7; SK Hynix to list ADRs on July 10

June FOMC minutes due on July 9 as investors watch Fed signals

South Korea’s stock market heads into the second-quarter earnings season in earnest this week, from July 6 to July 10, starting with Samsung Electronics Co.’s preliminary results. With semiconductor shares hit recently by concerns over slowing artificial intelligence investment, brokerages say the market’s direction will depend on whether earnings can help restore investor sentiment.

The Kospi closed at 8,088.34 on July 3, up 5.76%, reclaiming the 8,000 mark. NH Investment & Securities Co. forecast the benchmark will trade in a 7,200 to 9,000 range this week. Na Jung-hwan, an analyst at the firm, cited rising second-quarter earnings estimates as a positive factor, while concerns over slower AI capital expenditure and uncertainty over Federal Reserve policy remain downside risks.

Those concerns spread last week after a report said Meta Platforms Inc. was considering entering the cloud business by leasing its in-house AI infrastructure to outside companies. The report fueled worries that Meta could focus on monetizing existing infrastructure rather than expanding data center investment, weighing on sentiment toward chip stocks.

Na called that concern noise rather than a fundamental signal, saying it does not point to weaker demand for AI computing. In his view, the move would be a strategy to improve returns on infrastructure already built, not a sign of slowing AI demand or reduced capital spending.

Attention is now shifting to major events involving South Korea’s leading chipmakers. Samsung Electronics will release preliminary second-quarter earnings on July 7, and SK Hynix Inc. will list American depositary receipts on Nasdaq on July 10.

Samsung’s earnings could help ease concerns over slower AI investment and raise market expectations for the memory-chip cycle. SK Hynix’s ADR listing is also drawing attention on hopes that improved access for overseas investors will boost global liquidity inflows and lead to a re-rating of the company’s valuation.

Na said Samsung Electronics’ preliminary earnings are the first near-term catalyst for the market. A result that comes in well above consensus on operating profit would signal strength in the memory market and could shift sentiment from selling to holding and chasing gains.

Lee Kyung-min, an analyst at Daishin Securities Co., said South Korea’s stock market is entering a full-fledged second-quarter pre-earnings season, when estimates are revised ahead of results. Samsung Electronics’ preliminary earnings will be the turning point.

Lee said Samsung Electronics’ three-month consensus for second-quarter operating profit stands at 8.56 trillion won, while the one-month estimate is 8.48 trillion won. Recent debate over semiconductor demand, profitability and incentive payments has led to slight downward revisions, but the company’s earnings momentum remains clear.

If second-quarter results top expectations, the market could stage a sharp rebound, Lee said. Even if the earnings fall short, sentiment could still improve as long as there is no shock, as uncertainty would ease and investors may reassess the stock’s undervaluation.

Analysts are also urging investors to distinguish noise from genuine signals in the semiconductor sector. Kang Jin-hyuk, an analyst at Shinhan Securities Co., said the heavy concentration of investor flows into chip stocks is beginning to unwind in the second half, making that distinction increasingly important.

Investors will have to endure the noise until clearer signals emerge on the direction of AI capital spending, Kang said. He pointed to Samsung’s preliminary earnings, SK Hynix-related events and late-July guidance from big tech companies on free cash flow and capital expenditure as key indicators.

US monetary policy is another variable in focus. Kim Yu-mi, an analyst at Kiwoom Securities Co., said concerns over further tightening could ease somewhat next week as investors remain cautious ahead of Fed policy signals. She also said inflation pressure from energy prices is easing, with West Texas Intermediate crude trading below $70 a barrel.

Kim said the June Federal Open Market Committee minutes, due on July 9, will be a key event. The minutes should offer a clearer read on how Fed officials assessed inflation, the labor market and the need for additional rate increases.

Kim Yeon-ji, Hankyung.com reporter kongzi@hankyung.com