Kospi eyes 7,000 level as Chuseok holiday ends; Micron earnings, export data in focus

The Kospi, returning from the Chuseok holiday on Monday, is expected to battle for the 7,000 level this week. US Treasury yields surged past 5% during the break, but AI-related stocks rallied and Wall Street rebounded on the final trading day. Securities firms say Micron's earnings report and South Korea's September export data — both due later this week — will determine which way the domestic market moves.

Kiwoom Securities set its Kospi forecast range for the week at 6,800 to 7,250, while Daishin Securities projected the index would trade between 6,500 and 7,200 in October. Both firms flagged rising US Treasury yields as a headwind but highlighted improving corporate earnings, particularly in the semiconductor sector.

The Kospi swung sharply over the past month before recovering to the 7,000 level just before the holiday. After closing at 6,912.95 on Aug. 21, the index slid to 6,562.72 on Sept. 2 before rebounding to 7,051.64 on Sept. 9. It retreated again to 6,627.26 on Sept. 15, then reclaimed 7,000 with a close of 7,007.72 on Sept. 21, finishing at 7,080.92 on Wednesday — the last session before the holiday.

Han Ji-young, a researcher at Kiwoom Securities, said AI infrastructure stocks — including semiconductors driven by agentic AI — are regaining leadership. Given the market's growing tolerance for higher rates, she said the domestic market is likely to extend its recovery.

Lee Kyung-min, a researcher at Daishin Securities, said the key question is "what momentum can overcome the pressure from interest rates," adding that the market's direction hinges on corporate earnings. He said if oil prices and yields stabilize and third-quarter earnings come in above expectations, the Kospi's upward momentum will strengthen.

US stocks fell during the holiday period as Treasury yields spiked but bounced back on the final trading day. From Wednesday through Friday — while the Korean market was closed — the Dow Jones Industrial Average fell 0.1 percent, the S&P 500 dropped 0.3 percent and the NASDAQ declined 0.6 percent, weighed down by the 10-year Treasury yield surging as high as 5.2 percent intraday on Thursday. On Friday, however, falling crude oil prices and strength in technology stocks lifted the Dow 0.93 percent, the S&P 500 0.51 percent and the NASDAQ 0.48 percent. The Philadelphia Semiconductor Index also rose 1.41 percent.

The biggest market event this week is Micron's earnings report, due Wednesday (local time). Investors are focused on whether the US chipmaker maintained strong profitability as memory chip prices rise, and on its guidance for the next quarter. With expectations growing for server capacity expansion and increased DRAM demand driven by the expanding agentic AI market, management's outlook on memory demand will also be closely watched.

September export data, due Thursday, are also expected to show continued growth led by semiconductors. According to Kiwoom Securities, South Korea's exports from Sept. 1 to Sept. 20 rose 78.3 percent year on year, with semiconductor exports surging 259.4 percent to lead the overall gain.

The strong semiconductor export performance is expected to be reflected in third-quarter corporate earnings as well. According to an October market outlook report released Monday by NH Investment & Securities, the estimated controlling-interest net profit for domestic companies in the third quarter stands at 197.8 trillion won ($146 billion) — roughly triple the figure from the same period a year earlier. IT sector companies accounted for an estimated 156.3 trillion won of that total, or 79 percent, underscoring how concentrated the earnings recovery is in semiconductors and other IT industries.

US economic data will also be a key variable this week. The August personal consumption expenditures price index is due Wednesday, followed by the September nonfarm payrolls report on Friday. Kiwoom Securities estimates 100,000 new jobs were added in September, down from 162,000 the previous month. If the actual increase comes in as expected, concerns about further Federal Reserve rate hikes are likely to ease.

Han of Kiwoom Securities said any volatility arising from the back-loaded slate of major events — Micron earnings, export data and the jobs report — should be treated as an opportunity to increase equity exposure.