[Edaily Reporter kyoungeun kim ] With the KOSPI plunging 8.77% last week and entering a technical bear market, analysts predict that the domestic stock market will enter a phase this week where it tests its downside support. Given that the price-to-earnings ratio (P/E ratio) has fallen to its lowest level in 20 years—including the low point during the 2008 financial crisis—the decline is considered excessive.
On the 20th, Han Ji-young, an analyst at KIWOOM Securities, said "This week, the KOSPI is expected to enter a phase of testing its downside support, influenced by the weakness in U.S. and Japanese semiconductor stocks over the holiday period, geopolitical tensions between the U.S. and Iran, earnings reports from U.S. Big Tech companies such as Alphabet, Intel, and Tesla, earnings from major domestic companies, and changes in supply and demand following the announcement of leverage regulations on individual stocks," adding that the projected weekly range for the KOSPI is 6,300 to 7,300 points.
One analyst noted, “Since July, the KOSPI has fallen approximately 25.2% from its peak, entering a technical bear market,” adding, “The fact that leading stocks—such asSamsungElectronics(005930)(-29.7% from peak), SK hynix(000660)(-36.9%), and SamsungElectroMechanics(009150)(-43.7%)—have plummeted by 30–40% is amplifying the perceived severity of the decline.”

He identified “the market’s heightened sensitivity to already known negative factors” as a key characteristic of this sharp decline. While issues such as the CXMT IPO, delays in U.S. data center construction, and a slowdown in semiconductor profit growth had been highlighted multiple times during the first half of the year, he noted that at that time, bullish factors—such as rising semiconductor profits and the spread of the AI narrative—had offset these concerns. However, he assessed that the market’s reaction is now changing compared to the past. He explained, “A series of sharp declines—driven by profit-taking following the record-breaking surge in the first half, mounting pressure for price corrections, negative narratives surrounding the semiconductor sector, and supply-demand disruptions caused by leverage—is weakening the market’s underlying strength,” adding, “As time goes on, the market is creating a vicious cycle in which it is effectively conjuring up the very negative factors it wants to sell off.”
However, the market is assessed as offering clear valuation appeal. One analyst noted, “The KOSPI’s 12-month forward price-to-earnings ratio (P/E) stands at 5.8x, a level so low—having fallen to its lowest point in 20 years, including the low during the 2008 financial crisis—that the decline is considered excessive,” and “The index is expected to find support in the low-to-mid 6,000-point range, and the key question is how much of the recent sharp declines can be recovered through major events scheduled for this week.”
Researcher Han noted, “The core debate in the stock market recently has centered on the potential peak-out of KOSPI earnings growth—driven primarily by semiconductors—and the possibility of an early end to the AI investment cycle,” adding, “The earnings season for AI companies, which begins this week, will serve as a turning point to simultaneously assess the sustainability of AI demand and whether semiconductor stocks can break out of their current deleveraging and de-rating phase.”
Regarding Alphabet’s earnings report scheduled for the 23rd, the analyst noted, “Changes to their 2026–2027 capital expenditure (Capex) guidance and whether profitability in their core cloud business improves will be crucial,” adding, “If Capex guidance is maintained or raised while high cloud growth continues, this could alleviate concerns about AI demand.”
Regarding Intel’s earnings report on the 24th, the firm noted, “The key point to watch is whether server central processing unit (CPU) shipments are actually recovering, rather than just the growth rate of data center revenue,” and “Since the recent improvement in their earnings has relied in part on rising average selling prices, if server shipments also rebound this quarter, it is expected to signal that AI data center investment is expanding beyond graphics processing units (GPUs) and high-bandwidth memory (HBM) to include CPUs and general-purpose memory.” He also highlighted changes in comments regarding supply shortages of components such as memory and circuit boards as a key point to watch.
In South Korea, earnings reports are pending for leading stocks in the robotics, nuclear power, and banking sectors, including HyundaiMotor(005380), DOOSAN ENERBILITY(034020), and KB Financial Group(105560). One analyst noted, “While the KOSPI is currently caught in an environment of price corrections and heightened volatility driven by semiconductor stocks, value opportunities have emerged as non-semiconductor sectors have experienced a simultaneous sharp decline,” adding, “As we move into the latter half of the week, the momentum of the rebound is expected to vary by sector.”
Regarding the single-stock leverage regulations announced after the market closed last Friday, an analyst noted, “It will be worth watching whether companies such asSamsungElectronics(005930) and SK hynix(000660) can help mitigate volatility in semiconductor supply and demand.” While the suspension of new listings and the advertising ban will take effect immediately, major regulatory measures—such as raising the margin deposit requirement (from 10 million won to 30 million won), managing the price deviation ratio (from 3% to 2%), and changing the trading unit (from 1 share to 20 shares)—are scheduled to be introduced sequentially starting in August. He pointed out, “There may be limitations in effectively resolving the adverse effects of single-stock leverage starting this Monday, immediately following the regulatory announcement,” adding, “The same applies to the fact that measures previously discussed in the market—such as reducing leverage ratios and restricting the establishment of new single-stock leverage products—were not included.”
However, he noted, “It is worth noting that these regulatory measures can curb further overheating of leveraged betting, and that the total assets under management (AUM) for these single-stock leveraged products have decreased from a peak of 16 trillion won at the end of June to the current level of around 10 trillion won.” "Since the scale of AUM tends to be proportional to the impact of rebalancing, the amplification of supply-and-demand volatility is likely to be less pronounced compared to the first and second weeks of July," he explained. He added, "At present, given that the narrative surrounding the semiconductor industry itself and the recovery of its fundamentals take precedence over supply-and-demand issues stemming from leverage, it is appropriate to shift the focus toward corporate earnings events."