Stock Market Shaken by '3 Major Adverse Factors' Transition Phase... Investment Strategies Focused on FOMC?

[Asia Economy Reporter Ji Yeon-jin] As the three major risk factors shaking the domestic stock market entered a turning phase, the KOSPI index recovered to the 3000 level.

According to the financial investment industry on the 11th, investors' perception of the Omicron variant has changed. The variant's low fatality rate and the high efficacy of vaccine booster shots have significantly reduced the fear caused by the virus. Additionally, China's policy stance has also shifted. The recently announced Chinese policies on reserve requirement ratio cuts and interest rate reductions for small business loans have become a clue to alleviating concerns about stagflation. Lastly, concerns about a U.S. default have been resolved. The U.S. Congress agreed on the debt ceiling, so default concerns will not affect the domestic stock market until November next year.

Going forward, investors' attention is expected to focus on the U.S. Federal Open Market Committee (FOMC). The interview with Jerome Powell, Chairman of the Federal Reserve (Fed), on the 16th is likely to be an event reaffirming the tightening monetary policy. However, advice is to avoid excessive caution. Powell's hawkish shift has already been confirmed multiple times, and recently the dollar index has stabilized, so the focus of the response strategy after the FOMC should be on adapting to a shift towards value stocks rather than worrying about the stock market level.

Samsung Securities identified the IT sector as an investment strategy that responds to the U.S. tightening cycle while also leveraging changes in China's policy stance. Recently, foreign investors' inflows have been centered on IT, and there is abundant momentum for stock price movements in the future. Domestically, Samsung Electronics announced a new management strategy, and internationally, the Consumer Electronics Show (CES) is upcoming in January next year.

Samsung Securities recommended stocks include ▲Samsung Electronics ▲LG Electronics ▲LG Innotek ▲Rino Industrial and other IT materials and components sectors, as well as electric vehicle and battery material companies ▲Samsung SDI ▲Kia ▲POSCO Chemical ▲Korea Zinc. Large growth stocks such as Samsung Biologics and HYBE were also recommended.

This content was produced with the assistance of AI translation services.