Historic Surge, Is This the Start of a 'Reversal'? Conditions for 'Macro Stability' to Determine the Stock Market in the Second Half | Hong Seonae, Min Jaegi KB Securities PRIME CLUB Team Leaders

Summary

KB Securities PRIME CLUB Team Leader Min Jae-gi analyzes the historic July 31 surge in Korean equities, when record foreign buying and a sharp bounce in oversold large-cap tech stocks like SK Hynix and Samsung Electronics raised hopes of a market turning point. He explains the drivers: extreme oversold conditions, chairman purchases, reversed earnings downgrades, and forced deleveraging. However, he cautions that a true trend reversal depends on macro stability, particularly how the upcoming US Treasury QRA affects long-term yields.

• SK Hynix and Samsung Electronics led a massive rebound after July's severe sell-off, with SK Hynix hitting the daily upper limit.
• Record foreign net buying of over 7 trillion won on July 31 surpassed the previous 2004 record that marked a major KOSPI turning point.
• Earnings estimate upgrades for SK Hynix reversed the July 13 downgrade, removing a key bearish catalyst and sparking short-covering.
• Deeply oversold Korean large-cap tech names (Samsung Electro-Mechanics, LG Innotek, SK Square, Doosan Fuel Cell, Simmtech) also surged, illustrating bounce leadership.
• Samsung Electronics reached a PBR near 1x on 2026 book value, a historically strong support level in memory down-cycles.
• The sustainability of the rebound hinges on US long-term interest rates, with the upcoming US Treasury QRA as a key risk event.
• A potential rotation of funds into KOSDAQ could provide additional upside if speculative hot money shifts back into the broader market.