Sentiment Surge: Mid‑July’s Mood Wave Poised to Propel KOSPI and Shake FX
- 오리 오리
- Jul 28
- 3 min read
1. Introduction: From Measuring Mood to Making Predictions
Gone are the days when investors relied solely on balance sheets and macroeconomic releases. Today, quantifying the “invisible” forces that drive markets—collective investor mood—is at the forefront of cutting‑edge analysis. By assigning positive headlines (e.g. “boom,” “rebound”) weights of +10 to +20 and negative headlines (“decline,” “slump”) weights of –10 to –20, we obtain a daily News Sentiment Score that acts like a market thermometer.
In this post, we use SentimentLab‑6 data for July 14–24, 2025 to:
Track day‑by‑day sentiment alongside KOSPI, VIX (Fear Index), and USD/KRW.
Tie these readings to real‑world economic news—semiconductor export figures, U.S. inflation data, China’s PMI, and upcoming Bank of Korea policy decisions.
Project how these moods and metrics may shape the next two weeks and outline actionable strategies.
2. Daily Sentiment & Market Metrics
SentimentLab‑6 computes the average daily sentiment by weighting and summing all headlines published that day. Here’s how sentiment moved in mid‑July, compared to key market indicators:
Wide swings: From +1.68 down to –0.82, then back to +1.56.
Mid‑week caution (July 21–22): sentiment turned mildly negative despite stable KOSPI.
Late‑week rebound (July 24): sharp optimism mirrored in a temporary VIX trough and stronger Korean equities.
3. What Drove These Mood Swings?
3.1 Semiconductor Exports & Tech Leadership
July H1 saw semiconductor exports +12% YoY (Korea Trade Association).
On July 21, sentiment plunged to –0.82 as markets digested a one‑day export slowdown report, yet foreign and institutional buying kept KOSPI above 3,200.
By July 24, headlines celebrated renewed chip orders and capacity expansions, sending sentiment to +1.56 and sparking a late‑week rally in Samsung Electronics and SK Hynix.
3.2 Global Inflation & Risk Appetite
U.S. July 31 CPI preview (+3.0% expected) and August NFP (+230K forecast) hung over markets:
Fears of sticky U.S. inflation drove mid‑week caution (VIX hovered 16.5–16.7).
A surprise CPI undershoot would likely plunge VIX toward 14.5, but an upside surprise could push it back above 17.
China’s Caixin PMI 50.2 on July 22 briefly eased global growth concerns, but mixed trade‑tension headlines kept sentiment near zero.
3.3 Domestic Monetary Policy Signals
Bank of Korea meeting on August 7 is widely expected to hold rates at 3.50%:
July 21–22’s negative mood partly reflected speculation around a potential rate pause.
Confirmation of a hold should underpin the won, keeping USD/KRW in the 1,375–1,380 band and supporting local equities.
4. Forecast: Riding the Mood Wave into Early August
4.1 KOSPI Outlook
Scenario A (Bullish): If sentiment stays above +1.2, expect continued buying by foreigners/institutions.
Target range: 3,200–3,230, led by tech and export champions.
Scenario B (Caution): A dip below +0.5—perhaps on renewed China‑U.S. trade concerns—could test support near 3,170.
4.2 VIX Projection
Baseline: Further slide into 14.5–15.0 if U.S. CPI meets or disappoints, and no fresh geopolitical shocks.
Risk trigger: Any upside inflation surprise or trade‑talk breakdown could spike VIX above 17.0, prompting equity hedges.
4.3 USD/KRW Path
Pre‑CPI (until July 31): dollar strength bias toward 1,380–1,385 on U.S. inflation jitters.
Post‑BoK meeting (Aug 7): a policy‑hold outcome should strengthen the won to 1,375–1,380.
Upside risk: aggressive Fed‑watch headlines or local rate‑hike surprises could push USD/KRW above 1,390.
5. Tactical Playbook
Leverage ETFs:
Consider KODEX 200 Leverage if sentiment remains > +1.2 and tech earnings continue to impress.
FX Hedging:
Use FX forwards or put options around the 1,380 resistance to cap currency risk.
Export‑Heavy Portfolios:
Overweight semiconductors, 2nd‑gen batteries, and display panels—industries with strong order books.
Volatility Management:
Deploy put spreads on KOSPI futures if VIX clamps down below 15, locking in downside protection at an attractive premium.
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