The Korean stock market is expected to remain relatively calm ahead of the week-long holiday. 24th and 25th are designated as holidays, so a moderate volatility in the market is anticipated, and investors should reconsider their strategies during this period.
Kim Dae-jun, researcher at the Korea Investment & Securities Research Institute, said on the 21st that although “there may be some residual risks that could influence trading activity, there is no need for major concern right now.” He also noted that “the volatility index VKOSPI, which had peaked at 95% earlier this year, has dropped significantly to 44%.” He emphasized that “CDS premium, a measure of national risk, continues to decline and stabilize.”
Kim advised that investors should focus on sectors with higher relative yields compared to indices. “When the momentum for index gains is not obvious, markets tend to favor sectors with strong performance,” he said, adding that sectors such as semiconductor, display technology and industrial equipment, which have outperformed the KOSPI, are likely to maintain their advantage even in a subdued trading environment.
In particular, the display technology sector was highlighted. “In the last ten days, output per capita has surged 270% versus the same period last year, and with the 21st scheduled release of new products, further growth is possible,” he said. He added that “the upcoming microelectronics firm’s performance will also likely sustain a positive momentum, so AI‑related investments may continue to thrive.” Along these lines, Kim said that “in an environment where trading volume is expected to shrink, the possibility for sector rotation is low” and urged investors to consider short‑term trades in sectors that had seen gains earlier this week.
On the other side, the domestic market will take a break on 24th and 25th. China and Taiwan also observe holiday periods. Japan confirmed that it would close on the 21st, 22nd and 23rd as well.