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Key Summary
- **Record-Breaking Export Performance**: South Korea's exports in July 2026 surged by 62.8% year-on-year to $98.89 billion, marking an all-time high for any July.
- **Semiconductor Dominance**: Semiconductor exports reached $41.01 billion (+178.8%), surpassing $40.0 billion for two consecutive months and driving overall growth.
- **18-Month Consecutive Surplus**: The trade balance recorded a surplus of $30.32 billion, proving strong export fundamentals.
- **Strong Momentum in Early August**: Exports during August 1-10 also surged by 45.3% year-on-year to $21.3 billion, maintaining a record-breaking performance trend.
Current Status Summary
Recently, the KOSPI has been attempting a rebound, recovering from the sharp decline triggered by extreme sentiment contraction in July.
As of the close on August 16, 2026, the KOSPI index stood at 6,977.94 points, while the USD/KRW exchange rate maintained a gentle trend at 1,418.50 won.
Despite global macroeconomic uncertainties, South Korea's export and import performance in July exceeded market expectations.
According to the Ministry of Trade, Industry and Energy and the Korea Customs Service, July exports grew by 62.8% year-on-year to $98.89 billion, while imports increased by 26.5% to $68.56 billion, resulting in a trade surplus of $30.32 billion.
This strong export performance continued into early August, sending positive signals to the market.
On August 11, the Korea Customs Service announced that the tentative export figure for August 1–10 was $21.286 billion, a sharp increase of 45.3% year-on-year, setting an all-time high for early August.
This was driven by semiconductor exports during the ten days, which neared $9.952 billion and led an exceptional growth.
The trade balance for the ten days also recorded a surplus of $1.798 billion, greenlighting the continuation of the 18-month consecutive surplus streak.
| Segment | July 2026 Performance | August 1–10, 2026 Performance | YoY Growth Rate (July / Early Aug) |
|---|---|---|---|
| **Exports** | $98.89 billion | $21.286 billion | +62.8% / +45.3% |
| **Imports** | $68.56 billion | $19.488 billion | +26.5% / +23.1% |
| **Trade Balance** | $30.32 billion surplus | $1.798 billion surplus | Sustaining 18-month consecutive surplus |
| **Semiconductor Exports** | $41.01 billion | $9.952 billion | +178.8% / +155.4% |
Financial Analysis
The nation's trade financial strength stems from the continuity of trade surpluses and the diversification of key export items.
An analysis of South Korea's export structure in July showed qualitatively solid results, with 19 out of the top 20 key export items recording positive growth.
However, the excessive concentration of semiconductors in total exports remains a major point of observation.
The share of semiconductor exports in July stood at approximately 41.5%, but it soared to as high as 46.8% based on tentative figures for August 1–10, indicating a further deepening of dependency.
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In contrast, some industries, such as passenger cars (-80.9%) and shipbuilding (-58.2%), slowed down in early August due to differences in working days and delivery timings.
Consequently, balanced growth across all key export items is identified as a challenge for improving trade health in the future.
Valuation
Following the recent correction phase, the valuation of the KOSPI is positioned in a historically rare undervalued territory.
According to brokerage sources, the KOSPI's 12-month forward price-to-earnings (PER) ratio recently dropped to a level between 5.1x and 5.3x.
This is below the 6.27x level seen during the global financial crisis, highlighting extreme price attractiveness.
On the other hand, the 12-month forward earnings per share (EPS) estimates, which reflect companies' core strengths, are being revised upward or remaining robust.
With the USD/KRW exchange rate seeking downward stability around 1,418.50 won, there is also potential for the high exchange rate to support the KRW-denominated earnings of large-cap export stocks.
Therefore, the valuation indicators suggest that the downside support for the current stock market is very firm.
Expert & Institutional Analysis
Major brokerages analyze that instead of a sharp rebound to overcome the short-term drop, the KOSPI will show a "square-root (√) shaped rebound" by gradually steepening its upward angle.
A Hana Securities report noted, "Although market anxiety has not completely dissipated, undervalued prices and solid corporate earnings will serve as a strong foundation for a rebound."
Shinhan Securities also highly valued the recovery potential of fundamentals, stating, "This correction was caused by a crack in psychological trust rather than damage to earnings."
Ultimately, the prevailing analysis is that the speed and scale of the future rebound will depend on whether foreign capital, which had been concentrated on large export stocks, returns.
Attention is now focused on whether the scenario of foreign buyers turning net buyers will materialize, backed by record export data from the semiconductor super-cycle.
Risk Factors
The most immediate risk factor is an export structure excessively heavily weighted toward a single industry, semiconductors.
If concerns about global big tech companies reducing capital expenditures (CAPEX) or adjusting their pace on AI infrastructure investment become a reality, domestic stock markets and export engines could suffer simultaneously.
Energy price volatility and rising import cost burdens are also factors that cannot be ignored.
If oil price volatility expands due to recent geopolitical tensions in the Middle East and passage risks in the Strait of Hormuz, imports could surge, worsening the trade balance.
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Furthermore, the spread of global protectionism and adjustments in tariff and trade barriers by major countries could act as long-term cost risks for large export stocks.
Investment Perspective Summary
The strong run of semiconductor exports and solid trade surplus trends are highly likely to serve as a strong support for the KOSPI market.
Since valuations are passing through an extremely undervalued range, a split-purchase perspective focusing on large export stocks that have fallen excessively relative to earnings appears valid.
However, to cope with concerns about concentration in specific industries, a strategy of concurrently reviewing other strong export sectors, such as shipbuilding or cosmetics, for portfolio diversification could be highly useful under various scenarios.
As of August 16, 2026, Daily Stock's KOSPI Fear & Greed Index is at Neutral (55.6), showing a gradual normalization of sentiment from the 'Extreme Fear' observed one week ago (17.5) and one month ago (11.6).
For reference, the Nasdaq Fear & Greed Index is at Greed (65), which calls for careful attention to psychological discrepancies between domestic and foreign markets, as well as changes in the macro environment.
Investor Checklist Q&A
Q1. What was the core driver of the exceptionally large trade surplus in July 2026?
A1. The surge in semiconductor exports, driven by global AI infrastructure investment demand and rising fixed contract prices, was the key driver. Semiconductor exports comfortably surpassed $40.0 billion for two consecutive months, leading the overall performance.
Q2. Is this strong export trend continuing in early August?
A2. Yes. Exports during August 1–10 increased by 45.3% year-on-year to $21.3 billion, renewing the all-time high for early August.
Q3. What is the biggest concern regarding export concentration?
A3. The share of semiconductors reached 46.8% of total exports based on tentative figures for early August, indicating a very high level of dependency on a specific industry.
Q4. How is the current valuation attractiveness of the KOSPI evaluated?
A4. The KOSPI's 12-month forward PER has fallen to the 5.1x–5.3x range, securing a price attractiveness that is more undervalued than during the past global financial crisis.
Q5. What is the current psychological state of the market according to the Daily Stock Fear & Greed Index?
A5. The KOSPI Fear & Greed Index is currently in the Neutral (55.6) phase, demonstrating a stable soft landing of market sentiment compared to the previous extreme fear phase (17.5 one week ago).