(TrendHub KR – Posts by ICARUS Journalist) February 6, 2024, saw a continuation of the downward trend in the domestic stock market for the second consecutive day, in anticipation of the Lunar New Year holiday, influenced by the decline in the New York Stock Exchange and hawkish remarks from the U.S. Federal Reserve. The KOSPI index closed down 0.58% at 2,576.20, while the KOSDAQ index finished 0.12% lower at 807.03. Notably, combined net selling by institutions and individuals led the index lower, with foreign net buying unable to stem the decline.

The reduction in the likelihood of an emergency rate cut by the U.S. Federal Reserve, along with positive Purchasing Managers’ Index (PMI) data from the Institute for Supply Management (ISM), added uncertainty to financial markets. Asian stock markets also showed mixed reactions, continuing the global market’s instability.

Domestic and international demands for automation in semiconductor post-processing and news of Samsung SDI’s shipment of solid-state battery samples caught investors’ attention, emerging as a feature theme. Samsung Electronics’ unmanned post-processing strategy and the domestic research team’s acquisition of core technology for solid-state batteries are factors increasing interest in tech stocks.

Dual Insight Analysis

Positive Investment Perspective:

• Semiconductor Post-Processing Automation: Samsung Electronics’ automation strategy is expected to contribute to productivity improvement and the resolution of labor shortages. Tech stocks in this sector may represent long-term growth investment opportunities.
• Advancements in Solid-State Battery Development: Samsung SDI’s shipment of solid-state battery samples highlights the commercial viability of next-generation battery technology, presenting investment opportunities in related companies.

Negative Investment Perspective:

• Market Uncertainty: The instability of global financial markets and the U.S. interest rate hike trend could increase market volatility and investment risks in the short term.
• Investment Risks in Tech Stocks: Uncertainties in technological development and high valuation risks embody investment hazards in tech stocks, necessitating a cautious approach.

Featured Stocks and Theme Analysis

Solid-State Battery and Related Technology Theme

• Isu Specialty Chemicals (+29.87%), Isu Chemical (+7.08%), Lake Materials (+9.65%): News of Samsung SDI’s solid-state battery sample provision and the start of ‘P6’ premium battery mass production sparked significant interest. Isu Specialty Chemicals and Isu Chemical are distinguished in the chemical materials sector, while Lake Materials is noted for its technical prowess and market position in battery materials. These companies are expected to play crucial roles in the advancement of Samsung SDI’s forward-looking battery technologies.

Laser Application System and Solution Providers

• Hanbit Laser (+29.92%): Hanbit Laser contributes to technological innovation and industrial development by providing laser application systems and solutions necessary for secondary batteries, electric vehicles (EVs), and the semiconductor industry. The company’s entry into KOSDAQ and its efforts to develop technology for the domestication of charging and discharging devices establish its leadership in the field.

Generative AI Technology Development Companies

• Sandoll (+13.43%): Sandoll has opened a new chapter in AI technology by developing generative AI technology faster than Korea’s OpenAI. Through its subsidiary SandollMetalab, it operates the digital stock content service ‘Vivitree’, exploring the application possibilities in various fields with AI image generation, machine learning-based font search technology services, blockchain, and NFT businesses.

Biotech and Healthcare Companies

• Solux (+19.76%): Solux is actively diversifying its business, including acquiring additional stakes in Aribio and exploring expansion into bio-lighting new business areas. These strategic moves suggest Solux is preparing to take a significant position in the biotech and healthcare industries.

Semiconductor and Electronic Component Companies

• SK Hynix (+4.31%), Samsung Electronics (+0.13%), ISU Petasys (+5.48%), KC Tech (+12.46%): Benefiting from favorable conditions from U.S. Nvidia, these companies play critical roles in the semiconductor and electronic components industry. Especially, SK Hynix and Samsung Electronics solidify their leading positions in the global semiconductor market, continuously contributing to technological innovation and market expansion.

Other Notable Companies by Theme

• Woori Technology (+26.32%): Achieving market dominance through domestication in the semiconductor process control environment sector, traditionally monopolized by Japan. Woori Technology is expanding THC supply for EUV and HBM pre/post processes, preparing for increased demand from Samsung Electronics and SK Hynix.
• SamCNS (+16.07%): Achieved technological innovation with the world’s first development of large-area non-shrink LTCC ceramic STF, serving as the final customer for the top three global memory comprehensive semiconductor companies, accelerating in HBM and AI packaging ceramic business.
• EveryBot (+17.59%): The acquittal of Samsung Chairman Lee Jae-yong from legal risks brightens the prospects for large M&A by Samsung. Expected active M&A in new industries such as AI, robotics, automotive electronics, 6G communications, and biotech to strengthen business synergies.
• RS Automation (+8.09%): Receiving additional requests for semiconductor factory automation functions such as wafer transfer from Samsung Electronics, and supplying MMC-E robot motion controllers to Samsung Display and Hanwha, establishing itself as a key partner of Samsung Smart Factory.
• Hannong Chemicals (+14.03%): Leading in the development and commercialization of solid polymer electrolyte materials for lithium metal polymer batteries, highlighted by Samsung SDI’s solid-state battery sample shipment news.
• Dongwha Enterprise (+27.33%), DukSan Tecopia (+8.07%): Gaining attention with expectations of benefits from the U.S. IRA subsidies, especially focusing on market penetration through U.S. factories and securing competitive advantages over Chinese capital.
• Solvay Holdings (+19.33%): Pushing for a large-scale electrolyte contract with Samsung SDI amidst the ‘IRA special’, strengthening its position in the secondary battery materials market through electrolyte and lead tab businesses.
• EcoDream (+8.90%): Starting production of high-nickel NCM precursors with ‘purely our technology’ and beginning supply to clients, establishing a rapid mass production system following large supply contracts.
• CompanyK (+15.06%): Collaborating with LG Electronics and Upstage to target the on-device AI market, developing lightweight language models (SLM) and services to lead the AI laptop market.
• HandySoft (+14.56%): Highlighting AI software supply through the launch of the MS Teams-based SaaS electronic approval solution ‘HandyOne’ and the switch to Microsoft’s ‘Bing’ as Samsung’s search engine.

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Disclaimer: This article is written solely for informational purposes and should not be interpreted as investment advice or financial consulting in any form. TrendHub News does not bear legal responsibility for the content of the article. While the information provided is based on reliable sources, market conditions are subject to change. All investment decisions should be made under the investor’s own responsibility, and this article should not be the sole basis for any investment decision. It is recommended to consult with a professional before making any significant investment decisions.

<p>The post Korean Stock Market Closing – Analysis of Market Close and Key Themes on February 6th first appeared on TrendHub.</p>

KOSPI Closes Lower Amid Expectations of U.S. Rate Hike; KOSDAQ Edges Up

KOSPI Index

The KOSPI index closed at 2,609.50, down 0.62%.

Over the past weekend, the New York Stock Exchange fell due to profit-taking ahead of the holiday, while major European stock markets rose amid the digestion of the ECB’s interest rate hike and the advancement of defensive stocks.

The KOSPI index started the day at 2,618.06, gradually expanding its losses after forming a mid-day high at 2,619.44 in the early market. The index moved around the 2,605 line in the morning.

Around noon, the index recovered to the 2,610 line but expanded its losses again in the afternoon, being pushed back to 2,600.49 and forming a mid-day low. The index, which partially recovered some of its losses in the late market, eventually closed the market at 2,609.50.

The market closed lower as profit-taking sales were made due to recent short-term overheating concerns, amid a dominant wait-and-see attitude ahead of the U.S. stock market holiday.

Over the weekend, hawkish remarks from U.S. Fed officials also acted as a burden. Foreigners and institutions led the index’s decline with net selling. Foreigners turned to selling in just one day, and institutions net sold for four consecutive trading days.

In particular, profit-taking sales were seen centered around secondary battery-related stocks, which had recently shown noticeable increases. LG Energy Solution (-4.59%) closed sharply lower due to news such as the planned stock sale of its largest shareholder, LG Chem.

On the other hand, stocks related to Ukraine’s reconstruction, construction machinery, construction, modular housing, railways, and nuclear power generation showed strength ahead of the Ukraine Reconstruction Conference. Defense industry-related stocks also showed strength ahead of President Yoon’s visit to Vietnam due to expectations for defense exports.

As the U.S. Fed’s June FOMC regular meeting concluded, some Fed officials made hawkish remarks over the weekend.

Thomas Barkin, President of the Federal Reserve Bank of Richmond, argued that inflation is still too high and more interest rate hikes are needed. Christopher Waller, a Fed director, mentioned that policy interest rates are affecting some parts of the economy, the labor market is still strong, but core inflation is not moving, so more tightening may be needed to lower it.

Major Asian stock markets in Japan, China, Taiwan, and Hong Kong also closed lower.

In terms of supply and demand, foreigners and institutions net sold 359.5 billion and 78.7 billion, respectively, while individuals net bought 430.7 billion. In the futures market, foreigners and institutions net sold 2,811 contracts and 1,385 contracts, respectively, while individuals net bought 2,884 contracts.

The won-dollar exchange rate recorded 1,282.0 won, up 10.1 won from the previous trading day.

The yield on the 3-year government bond fell 0.2bp from the previous trading day to 3.583%, and the 10-year yield fell 2.4bp from the previous trading day to 3.633%.

The 3-year government bond futures closed at 103.90, up 2

KOSDAQ Index

The KOSDAQ index closed at 888.61, up 0.07%.

Over the past weekend, the New York Stock Exchange fell due to profit-taking ahead of the holiday, and the KOSDAQ index started the day at 888.52, slightly stronger.

The index quickly turned to a decline, expanding its losses to form a low at 881.14. It turned to an increase in the morning, forming a mid-day high at 889.49, but then turned to a decline again, being pushed below the 884 line in the afternoon. After gradually recovering some of its losses, the index eventually closed the market at 888.61.

While there was a decline in the mid-market due to profit-taking sales following recent short-term increases, the index rose for the third consecutive day as some top market cap stocks continued to strengthen amid individual net buying. However, net selling by foreigners and institutions limited the increase.

In terms of supply and demand, individuals net bought 229.4 billion, while foreigners and institutions net sold 201.6 billion and 11.8 billion, respectively.

Top market cap stocks on the KOSDAQ showed a predominance of rising stocks. Alteogen (+5.50%), Posco DX (+4.87%), EcoPro (+4.32%), Dongjin Semichem (+2.40%), WCP (+1.94%), Caregen (+1.76%), SM (+1.11%), Classis (+1.10%), Reno Industrial (+0.81%), EcoPro BM (+0.38%), Pearl Abyss (+0.20%), and JYP Ent. (+0.07%) all closed higher. On the other hand, Kakao Games (-3.54%), HLB (-3.10%), L&F (-3.02%), HPSP (-3.02%), Celltrion Pharm (-2.40%), Celltrion Healthcare (-1.67%), Chonbo (-0.30%) closed lower.

In terms of industry, there were mixed increases and decreases. Finance (+3.17%), construction (+2.46%), transportation (+1.50%), non-metal (+1.08%), metal (+0.74%), food and tobacco (+0.71%), other services (+0.69%), computer services (+0.57%), IT parts (+0.28%), and information devices (+0.26%) industries all closed higher. On the other hand, other manufacturing (-1.82%), internet (-1.17%), broadcasting services (-1.17%), chemical (-0.85%), distribution (-0.80%), telecommunications broadcasting services (-0.78%), publishing/media reproduction (-0.68%), paper/wood (-0.61%), pharmaceutical (-0.50%), and semiconductor (-0.37%) industries all closed lower.

Investment Insight

With the stock market seemingly caught in a tug-of-war between the prospect of a U.S. rate hike and optimistic developments such as President Yoon’s visit to Vietnam, investors are advised to keep a close eye on these events. Notably, sectors related to the reconstruction of Ukraine and the defense industry should be on the radar for potential investment opportunities.

<p>The post [June 19 Korean Stock Market Report] – Defense Industry Rally Triggered by President Yoon’s Vietnam Visit first appeared on TrendHub.</p>