Samsung Electronics saw a strong surge of over 4% in pre-market trading. Analysts believe this was primarily driven by expectations of further US-Iran negotiations, a sharp drop in oil prices, and a boost in investor sentiment from the simultaneous rise in US AI and semiconductor stocks.
According to Nextrade data, Samsung Electronics was trading at 215,500 won in pre-market trading, up 9,000 won (4.36%) from the previous trading day. The current price is 214,500 won.
New York stocks closed higher last night, buoyed by easing expectations of geopolitical risks and milder inflationary pressures. The Dow Jones Industrial Average rose 0.7%, the S&P 500 gained 1.2%, and the Nasdaq Composite climbed 2.0%. Among semiconductor stocks, Megvii Technology surged 9.1% and Nvidia climbed 3.8%, which also positively impacted investor sentiment towards large-cap domestic semiconductor stocks.
Oil prices and exchange rates also showed positive trends. West Texas Intermediate (WTI) crude oil prices plummeted 8.1% to settle at $91.40 a barrel; the USD/KRW exchange rate fell to 1470.4 won. With easing pressures from raw materials and exchange rates, overall risk appetite in the South Korean stock market is recovering.
Price indicators also brought relief to the market. The U.S. Producer Price Index (PPI) rose 4.0% year-on-year in March, lower than the market expectation of 4.6%. Following the Consumer Price Index (CPI), the PPI also fell short of expectations, leading the market to believe that concerns about war-induced inflation have eased.
Kiwoom Securities researcher Han Zhiying analyzed that factors such as expectations of further US-Iran negotiations, the plunge in WTI oil prices, and lower-than-expected March PPI jointly contributed to the easing of war risks and the strength of AI and technology stocks. She further pointed out that the KOSPI index is expected to continue its upward trend based on factors such as falling oil prices, the strength of the Nasdaq centered on semiconductor stocks, and the depreciation of the USD/Korean won exchange rate.
Furthermore, the MSCI Korea Index's forward earnings per share growth rate, based on April, reached 195%, far exceeding the US's 23%, Japan's 5%, and Germany's 5%. This is also seen as a factor boosting domestic stock market earnings growth expectations. Previously, the market had been led by semiconductor stocks with clear expectations of improved performance.
