[Good Morning Stock Market] Omicron Worries Eased for Now... Foreign Investors' Supply and Demand Key

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Junho Hwang] Following the KOSPI's breakthrough of the 3000-point mark on the 8th, attention is focused on whether it can stabilize above 3000 on the 9th. The U.S. stock market closed slightly higher amid a shift to a cautious stance due to the Federal Open Market Committee's hawkish tone on monetary policy, despite news that the Omicron variant of COVID-19 poses a lower risk of severe illness. In the U.S. market, metaverse and reopening stocks stood out.

On the 8th (local time), the Dow Jones Industrial Average, which consists of blue-chip stocks, closed at 35.32 points (0.10%) higher than the previous trading day at 35,754.75. The S&P 500, focused on large-cap stocks, rose 14.46 points (0.31%) to 4,701.21, and the tech-heavy Nasdaq Composite Index closed at 15,786.99, up 100.07 points (0.64%).

By sector, communication (0.8%), healthcare (0.7%), and real estate (0.5%) showed strength. Conversely, financials (-0.5%), consumer staples (-0.4%), and utilities (-0.1%) declined.

On this day, the U.S. stock market reacted to news that existing vaccines are effective against Omicron. Pfizer and BioNTech announced initial research results stating that neutralizing antibodies in those fully vaccinated decrease 25-fold against Omicron. They further claimed that receiving an additional vaccine dose can restore protection against the Omicron variant to levels similar to those against the original virus. However, the companies noted that it is still too early to be certain but estimated that the probability of Omicron becoming the dominant strain in the U.S. by next spring is over 50%.

In the Korean stock market, where the vaccination rate has surpassed 83.3%, such news is expected to act as a positive factor. Sangyoung Seo, a researcher at Mirae Asset Securities, stated, "As concerns over Omicron ease, reopening-related stocks are rising, and the strength of metaverse-related stocks triggered by Apple is expected to continue in the domestic market."

Additionally, Chinese inflation indicators are expected to influence the market on this day. The key issue is whether stability will be maintained compared to the previous month. Also, since it is the futures and options expiration day, attention should be paid to foreign investors' futures trends.

Jiyoung Han, a researcher at Kiwoom Securities, said, "It is appropriate to prepare for increased intraday index volatility due to changes in futures and spot supply and demand by foreigners and institutions today," adding, "Rather than overall index movements, a differentiated market by individual sectors and themes is expected to unfold."