Continued Stock Market Correction, Rebound Expected Around Mid-March

[Asia Economy Reporter Song Hwajeong] Amid the ongoing correction phase in the stock market, a rebound is expected around mid-March.

According to KB Securities on the 6th, after digesting uncertainties in early March, the stock market is expected to rebound around mid-March. Eun-taek Lee, a researcher at KB Securities, explained, "It is common for a correction to occur 12 to 18 months after the economic recession bottom," adding, "This is a problem caused by the economy being too strong, meaning the correction appears due to concerns about tightening." He further noted, "However, after a sharp rise, around May, the market is likely to focus again on tightening issues."

He expressed the view that sector rotation strategies are effective in the first half of the year, while attention should be paid to growth stocks in the second half. Lee said, "The current macro environment is unfavorable for growth stocks," and added, "In the second quarter, discussions on digital tax will also intensify, so a very favorable environment for growth stocks is unlikely to unfold for the time being."

Lee suggested, "It is better to make major moves in the second half rather than the first half, focusing on growth stocks with reduced price burdens," and continued, "Instead, in the first half, sector rotation strategies are effective. From March to April, I propose a strategy of accumulating small profits through re-flation-related stocks (financial and cyclical stocks) and niche sectors (apparel distribution, education, media entertainment, and other consumer discretionary sectors)."