[Edaily Reporter Kim Kyung-eun ] While semiconductors remain the key drivers of the KOSPI’s rally, analysts suggest that sectors showing improved earnings—such as cosmetics, insurance, and capital goods—are likely to generate outperformance during periods of sideways movement.

Lee Sang-hyun, an analyst at Meritz Securities, stated in a report on the 19th, “While semiconductors and IT hardware have proven to be the driving forces behind the index’s upward trend, it is expected that sectors with low earnings expectations will offer easier opportunities to pursue alpha when the index is trading sideways.”

The assessment is that while semiconductors and information technology (IT) hardware already account for a significant portion of market earnings—making the likelihood of further earnings surprises relatively low—in sectors where market earnings expectations were previously low, results that exceed forecasts could serve as a catalyst for stock price gains.

In fact, among the stocks that beat estimates following the second-quarter earnings announcements, LG H&H(051900)stood out in the cosmetics sector. LG H&H’s second-quarter operating profit was 103 billion won, exceeding the market forecast of 75 billion won by 36.7%. Net profit also came in at 74 billion won, 47.2% higher than the forecast of 50 billion won.

In the insurance sector, HANWHA LIFE INSURANCE(088350), DB INSURANCE(005830), and Hyundai MARINE & FIRE INSURANCE CO.,LTD(001450) all significantly exceeded earnings expectations. HANWHA LIFE INSURANCE’s second-quarter operating profit was 198.5% higher than the forecast. DB INSURANCE and Hyundai MARINE & FIRE INSURANCE CO.,LTD. also exceeded their respective forecasts by 77.7% and 43.3%.

In the capital goods sector, companies such as HANWHA AEROSPACE(012450), LG Corp.(003550), and HANWHA SYSTEMS(272210) exceeded their second-quarter operating profit forecasts. HANWHA AEROSPACE’s operating profit was 37.1% higher than the forecast, while LG Corp.’s was 42.0% higher and HANWHA SYSTEMS’ was 76.2% higher.

Last week’s capital flows also showed no notable concentration in the semiconductor sector. Despite rising stock prices in the semiconductor sector, capital inflows into exchange-traded funds (ETFs) remained relatively weak. While the machinery sector, including electrical equipment, saw a return of just 5.9%, the artificial intelligence (AI) power infrastructure theme recorded a net inflow of 91 trillion won.

Rather than a concentration of funds in specific themes, there was also a trend of capital flowing into index-based products such as the KOSPI 200 and KOSDAQ 150. This is interpreted as a sign that the upward trend is spreading across the broader market, rather than being centered solely on semiconductors.