KOSPI attempts to regain the 7,000 mark thanks to semiconductor strength amid geopolitical instability in the Middle East

(Seoul = Yonhap News) Reporter Kim Yu-hyang = On the 9th, attention is being paid to whether KOSPI will be able to try again to regain the 7,000 mark based on the strength of semiconductors amidst geopolitical instability in the Middle East, rising oil prices, and continued caution over U.S. price indicators.

The previous day, KOSPI started on the rise and continued its upward trend, but turned downward at the end of the regular session and closed at 6,954.52, down 40.87 points (0.58%) from the previous trading day.

The index started at 7,045.79, up 50.40 points (0.72%), and rose to 7,171.52 at one point, but ended trading with '7,000 pi' (KOSPI 7,000) returned.

In the stock market, foreigners and institutions continued to 'buy' for the fourth trading day until the previous day, but individuals showed a selling advantage of over 3 trillion won.

Foreigners and institutions made net purchases of 648.2 billion won and 642.7 billion won, respectively, and individuals net sold 3.0329 trillion won. Other corporations had a purchasing advantage of 1.7586 trillion won.

Samsung Electronics [005930] (-0.19%), which led the KOSPI in the first half of the regular session, eventually closed lower, and SK Hynix [000660] (+0.56%) also reduced its rise.

The day before, Saudi Arabia announced that several energy-related facilities in the south had been hit by missile and drone attacks by Yemen's pro-Iranian rebels, the Houthis, and that some operations were halted due to fire.

In addition, there has been growing wariness about US price indicators such as the Producer Price Index (PPI) and Consumer Price Index (CPI), which will be announced later this week, and the tariff conflict between the US and Canada appears to have dampened investment sentiment.

Accordingly, the three major indices fell simultaneously in the New York Stock Exchange, which resumed trading after being closed for the weekend and Labor Day holiday.

The Dow Jones Industrial Average fell 1.18% from the previous day, and the Standard & Poor's (S&P) 500 Index and the Nasdaq Composite Index centered on technology stocks fell 0.58% and 0.32%, respectively.

This is due to growing concerns about supply disruptions as fighting intensified in the Strait of Hormuz last night and in the Red Sea route, which is influenced by the Houthi rebels close to Iran.

Around the time the U.S. market closed, there were also reports that an Iranian small oil tanker was attacked by a U.S. missile in the waters near Harg Island in the Gulf Sea, a key base for Iranian crude oil exports.

Iran's Islamic Revolutionary Guard Corps (IRGC) Navy also predicted retaliation for the U.S. attack.

As a result, international oil prices rose to a level close to $100 per barrel. The closing price of Brent crude oil futures for November delivery rose 0.95% from the previous session to $97.92 per barrel, and the closing price of West Texas Intermediate (WTI) futures for October delivery was $93.03 per barrel, up 1.69% from the previous session.

The U.S. 10-year Treasury bond interest rate rose to 4.805%, exceeding 4.8% again.

However, despite this situation, semiconductor-related stocks generally performed strongly. The Philadelphia Semiconductor Index rose 1.30%.

By stock, Intel (9.05%), AMD (5.90%), Broadcom (2.98%), and Seagate (6.49%) soared, while SK Hynix's American Depository Receipt (ADR) also jumped 4.83%.

Seo Sang-young, managing director of Mirae Asset Securities, said, "As it was reaffirmed that demand for AI is expanding through Citigroup's TMT (Technology, Media, Telecommunications) conference and Goldman Sachs conference, related stocks showed strength."

Despite worsening risk investment sentiment due to external issues, Morgan Stanley Capital International's (MSCI) Korean stock market exchange-traded fund (ETF), which can gauge investment sentiment in the domestic stock market, rose slightly to 0.55%.

However, the influence of geopolitical issues may continue during the day on the domestic stock market.

In particular, foreign investment banks (IBs) are also continuously raising their oil price forecasts to reflect the possibility that the supply disruption of crude oil from the Middle East will be prolonged, so the influence of related external variables is expected to continue for the time being.

Bank of America (BofA) predicted that if the conflict limiting crude oil supplies continues until the end of the year, Brent crude oil could trade between $95 and $120 per barrel, and if it spreads into a widespread conflict that damages key energy infrastructure, it could soar to as high as $150.

Jiyoung Han, a researcher at Kiwoom Securities, predicted, “Despite the strength of Philadelphia semiconductor stocks in the U.S., the domestic stock market will show a hectic market with upper resistance near 7,000 points due to the renewed conflict between the U.S. and Iran and the expansion of CPI caution in August.”

One researcher added, “The KOSPI 7,000 points acted as a selling point due to large-scale net selling by individuals amid the Middle East instability,” and added, “As the KOSPI failed to enter 7,000 points during the day several times since August, the index was recognized as a psychological resistance line.”