[E-Daily Reporter Park Sun-Yeop ] This week, the domestic stock market is expected to remain highly volatile as it seeks to rebound following a sharp decline. With the KOSPI having fallen to a valuation range lower than during the global financial crisis, a series of events are on the horizon, including U.S. inflation data, the Bank of Korea’s Monetary Policy Committee meeting, and earnings reports from ASML and TSMC. This week is likely to determine whether the “semiconductor peak theory” that has weighed on the market will lead to an actual slowdown in fundamentals or prove to be merely an overreaction.
According to MP Doctor on the 12th, the KOSPI closed at 7,475.94 last week, down 612.40 points (7.57%) from the previous week. On the 10th, the index rebounded by 2.52% thanks to institutional buying, but this was insufficient to offset the weekly decline. SamsungElectronics(005930) Following the release of preliminary earnings reports, the “semiconductor peak theory” gained traction, and combined with foreign selling and liquidation of leveraged products, the market experienced sharp volatility, triggering circuit breakers and buy/sell side cars in quick succession.

◇ Testing the Theory That Semiconductors Have Peaked… Focus on ASML and TSMC Earnings
Market attention is expected to turn back to the semiconductor sector this week. Starting with ASML on the 15th and followed by TSMC on the 16th, global semiconductor companies will release their earnings reports in quick succession. Rather than the earnings figures themselves, ASML’s order backlog and guidance, as well as TSMC’s demand for AI and high-performance computing and its capital expenditure plans, are likely to serve as key indicators for market assessment.
These companies’ earnings are expected to serve as a litmus test for the recently surfaced “semiconductor peak theory.” Despite last week’s sharp decline, this year’s KOSPI net profit forecast was revised upward by more than 24 trillion won compared to the previous week, with most of the increase concentrated in the IT and semiconductor sectors. There are still no clear signs that could derail profit forecasts, such as a reduction in capital expenditures by hyperscalers, a decline in long-term HBM contracts, or a slowdown in the upward trend of server DRAM prices.
If ASML and TSMC reaffirm robust demand and capital expenditure plans, the recent “semiconductor peak” theory may subside somewhat. On the other hand, if they report a slowdown in orders or issue conservative guidance, concerns about the AI investment cycle reaching its peak could resurface, raising the possibility of increased volatility in domestic semiconductor stocks and the broader index.
Na Jeong-hwan, an analyst at NH INVESTMENT & SECURITIES, said, “As the market assesses whether semiconductor earnings growth has peaked, it is highly likely that the market will continue to fluctuate within a narrow range for the time being to absorb selling pressure,” adding, “We project the KOSPI to trade between 6,900 and 7,900 this week.” He assessed, “For a sustained recovery, we need events that support upward revisions to earnings forecasts, continued AI demand, and expanded capital expenditures by Big Tech companies.”
◇CPI and Monetary Policy Committee: Will They Spark a Rebound?
Inflation and monetary policy are also key variables that will determine the direction of the stock market. On the 14th, the U.S. Consumer Price Index (CPI) for June and Federal Reserve Chair Kevin Warsh’s semi-annual monetary policy report to Congress are scheduled. On the 15th, the U.S. Producer Price Index (PPI) and China’s second-quarter Gross Domestic Product (GDP) will be released, and on the 16th, U.S. retail sales figures will be announced and the Bank of Korea’s Monetary Policy Committee will convene.
The market is watching closely to see if the U.S. CPI will signal that recent inflationary pressures have peaked. If the inflation rate slows as expected, concerns over interest rate hikes and the strong dollar could subside, bringing a sense of relief to the domestic stock market. Conversely, if inflation exceeds market expectations due to tensions in the Middle East and rising oil prices, U.S. Treasury yields and the won-dollar exchange rate could rise again, putting pressure on foreign investor sentiment.
Domestically, the Bank of Korea’s policy assessment is the focus of attention. The market is expected to closely monitor not only the benchmark interest rate decision itself but also the Bank of Korea’s assessment of inflation and exchange rate volatility, as well as any comments on the future interest rate path. Given the recent weakness in the won and persistent high inflationary pressures, a hawkish message could lead to renewed volatility in growth stocks and overvalued sectors.
The second-quarter earnings season for U.S. companies is also set to begin in earnest. Major financial institutions such as JPMorgan, Goldman Sachs, Citigroup, and Bank of America will be among the first to report their results. As the market assesses whether financial deregulation and robust consumer spending have translated into actual earnings improvements, it will also be possible to gauge the resilience of the U.S. economy and the direction of global risk appetite.

◇ P/E Ratio Lower Than During the Financial Crisis… “More Sensitive to Positive Factors Than Negative Ones”
The fact that the recent sharp decline in the KOSPI has significantly reduced valuation pressures is a factor that should support the index’s bottom. The KOSPI’s 12-month forward price-to-earnings ratio (P/E ratio) stands at 6.17x, below the low of 6.27x recorded during the global financial crisis. Although stock prices have fallen by more than 20% from their peaks, earnings forecasts—particularly for companies listed on SamsungElectronics(005930)and SK hynix(000660)—have actually risen, widening the gap between stock prices and fundamentals.
Lee Kyung-min, an analyst at DaishinSecurities, noted, “Since the market has fallen below a key support level, it will take time for a trend reversal, but we are in a phase where the index could rebound quickly even on minor positive news,” adding, “We expect the catalyst for a reversal to emerge in the not-too-distant future.” He stated, “We view the break below the 7,000 level as an undershooting phase, and a strategy of gradual buying and accumulation by taking advantage of volatility is necessary.”
However, some point out that it is difficult to expect an immediate return to an uptrend based solely on attractive valuations. Recently, the market has shown a trend of increasing intraday volatility despite declining trading volume and turnover. In particular, on the KOSDAQ, the buying base has weakened as retail trading has rapidly contracted, leading to sharper declines even in response to minor selling pressure.
While it is difficult to conclude that the bull market has completely ended, the fact that the gap between days of sharp gains and sharp losses is rapidly narrowing is a cause for concern. Amid persistently high volatility, if investor sentiment tilts heavily in one direction, the index could be significantly shaken by even minor shocks. Analysts predict that volatile trading conditions are likely to continue until the end of this month, when U.S. Big Tech companies begin releasing their earnings reports in earnest.
Securities analysts are advising investors to engage in staggered buying while monitoring earnings and supply-demand dynamics, rather than chasing short-term rebounds. Semiconductors, power equipment, and energy storage systems (ESS)—where earnings forecasts are being revised upward—are cited as sectors of primary interest. Non-semiconductor export-oriented stocks, such as automobiles and industrial goods, could also attract rotational buying if they report earnings that exceed lowered expectations.