Domestic Market Closing Brief & AI Investment Ideas — 2026-07-07

Market Closing Status

• KOSPI Index: Fell to the 7,650 level (down 3–5% compared to the previous day)
• KOSDAQ Index: Remained flat amidst oscillating trading

Key Highlights

• Foreign 'Selling Storm': Foreign investors triggered a 2.9 trillion KRW profit-taking sell-off, pushing KOSPI below the 8,000 mark. While individual investors bought 1.5 trillion KRW worth of stock, it was not enough to offset the decline.

• Spreading 'Peak-Out' Fears in Semiconductors: Despite Samsung Electronics reporting Q2 earnings that exceeded market expectations, sell-offs intensified due to concerns over a potential "peak-out" in the sector.

• Escalating Geopolitical Risks: New geopolitical uncertainties regarding the Middle East and China have further soured market sentiment.

1 sources

news1.kr

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Today's Featured Stocks & Major Issues

Samsung Electronics (Dropped 5% despite record-breaking results)

• Though the company reported an earnings surprise, the stock fell over 5% under heavy foreign profit-taking. Investors with higher expectations are now putting pressure on revaluation.

SK Hynix (Down 3–4%, ahead of July 10 earnings disclosure)

• SK Hynix is currently undergoing a correction with a 3–4% drop ahead of its upcoming Nasdaq listing. Analysts suggest a target price of 3.9 million KRW, citing potential for increased profit and shareholder returns.

Top Stocks Bought by Expert Investors: Samsung Electronics, SK Hynix, Samsung Electronics Pref.

• The top 1% of investors have been aggressively buying Samsung Electronics, SK Hynix, and Samsung Electronics Pref., viewing the current market as a bargain-hunting opportunity.

AI-Driven Investment Ideas

1. Semiconductor Sector: Short-term correction, mid-term bullish trend expected Analysts view the recent correction as a "short-term speed control" and expect the semiconductor-led AI trend to continue through the second half of the year. The Head of Research at Shinhan Securities expects a performance turnaround for the KOSDAQ, supported by policy expectations and increased domestic semiconductor investment.

2. Earnings Season: Opportunity for revaluation of 'Non-Leading Stocks' It is worth paying attention to non-leading sectors (such as shipbuilding and finance) that are expected to show a performance turnaround in the second half of the year, rather than chasing stocks that have already spiked.

3. Continued Gains for Securities Stocks: Rising trading value & leverage ETFs Securities stocks are benefiting in 2026 from increased trading value and rising volume in leverage ETFs. Strategies focusing on performance and dividend-yielding stocks from Korea Financial Group, NH Investment & Securities, Samsung Securities, Kiwoom Securities, and Mirae Asset Securities are noteworthy.

1 sources

blogger.googleusercontent.com

blogger.googleusercontent.com

Investment Risks & Macro Context

1. Deteriorating Foreign Supply and Demand: The 2.9 trillion KRW foreign "selling storm" remains the primary burden on the market. Profit-taking sentiment is in full swing, raising concerns about continued supply-side instability.

2. Exchange Rate Consolidation: The KRW-USD exchange rate is trading at around 1,530 KRW (down 4–5 KRW from the previous day), but caution is needed regarding potential shifts in the US Federal Reserve's monetary policy.

3. Single-Stock Leverage ETF Fatigue: The recent volatility in KOSPI indicates fatigue stemming from the supply and demand dynamics of single-stock leverage ETFs, suggesting a need for structural improvement in market volatility.