The KOSPI, which closed lower for two consecutive sessions, is expected to rebound and attempt to reclaim the 8,400 level, buoyed by an overnight rally in U.S. stocks led by technology shares.
According to the financial investment industry on Monday, the combined market capitalization of 619 stocks traded on alternative trading system Nextrade (NXT) was up 0.66% as of 8:17 a.m. Samsung Electronics (005930.KS) and SK hynix (000660.KS) gained around 0.6% and 0.1%, respectively.
Analysts said the KOSPI is likely to halt its two-day decline and rebound during the session. With U.S. markets in New York closing broadly higher overnight on a tech rebound, the Korean market could see chip-led gains.
The Dow Jones Industrial Average rose 0.59% from the previous session to break above 52,000 for the first time, while the Standard & Poor's (S&P) 500 and the Nasdaq gained 1.18% and 2.07%, respectively. Technology stocks, which had weakened last week on concerns about overvaluation of artificial intelligence (AI)-related shares, rose and pushed the indexes higher.
The Philadelphia Semiconductor Index rose 3.83% as Nvidia (1.27%), Micron Technology (1.14%) and Broadcom (2.04%) advanced. Alphabet, Google's parent company, jumped 4.82% on its first day of inclusion in the Dow. In addition, an agreement between the United States and Iran to halt mutual attacks that had continued through the weekend stimulated buying.
The MSCI Korea exchange-traded fund (ETF), a gauge of investor sentiment toward the Korean market, rose 0.11%.
Han Ji-young, an analyst at Kiwoom Securities, said, "It is true that the burden of concentration has accumulated, but there are no major warning signs in the fundamentals of chip stocks, such as continued memory price increases driven by strong AI demand and the effects of long-term supply contracts." She stressed, "It is appropriate to make the chip-led uptrend in the market the center of a response strategy, given that this trend remains valid."
Han said, "The Korean market is also expected to open higher, supported by the successful intraday rebound of U.S. chip stocks and the easing burden of the U.S. 10-year Treasury yield." She added, "However, as this is the last trading day of June, it is necessary to prepare for the possibility that supply-and-demand volatility in chip stocks late in the session, due to quarter-end and half-year-end rebalancing, could cap the upside of the market."
