[Good Morning Stock Market] US Meta Shock, Will It Spread to the Domestic Stock Market?

On the 26th, dealers were working in the dealing room of Hana Bank in Euljiro, Seoul. On that day, the KOSPI index opened at 2,929.75, up 9.36 points (0.34%) from the previous session. The won-dollar exchange rate started at 1,196.9 won, down 1.7 won. Photo by Moon Honam munonam@

[Asia Economy Reporter Junho Hwang] As the three major U.S. indices fell simultaneously for the first time in five trading days, domestic stock market outlooks are also divided.

On the 3rd (local time), the Nasdaq index, which is tech-stock centered, closed at 13,878.82, plunging 538.73 points (3.74%) compared to the previous trading day in the New York stock market.

The Dow Jones Industrial Average fell 518.17 points (1.45%) to 35,111.16, and the S&P 500 index dropped 111.94 points (2.44%) to close at 4,477.44.

The day before, the stock price of Meta Platforms, the parent company of Facebook, sharply declined, freezing investment sentiment in tech stocks. Additionally, due to interest rate hikes by various countries, a tech-stock-centered downtrend appeared.

The Bank of England (BOE), the UK's central bank, raised its benchmark interest rate to 0.5% on the same day. This is the second rate hike following December. Despite a sharp rise in inflation, the European Central Bank (ECB) maintained its existing policy. However, the Pandemic Emergency Purchase Programme (PEPP) is scheduled to end in March this year as planned.

Oil prices surged significantly. Following North Sea Brent crude, West Texas Intermediate (WTI) crude oil prices surpassed $90 per barrel for the first time in over seven years. On the 3rd (local time), at the New York Mercantile Exchange, the March delivery WTI price closed at $90.27 per barrel, up 2.28% from the previous day. This is the first time since October 2014, over seven years and three months, that WTI prices have closed above $90 per barrel.

As such, with an environment pressuring investment sentiment unfolding, outlooks for the domestic stock market on this day are also divided.

Sangyoung Seo, a researcher at Mirae Asset Securities, analyzed, "The Korean stock market showed strength reflecting the global stock market rise during the Lunar New Year holiday. However, the fact that the U.S. stock market, centered on Nasdaq, fell the day before will be a burden on the domestic stock market."

Jiyoung Han, a researcher at Kiwoom Securities, explained, "The U.S. stock market's sharp decline is judged to have deepened due to profit-taking pressure following four consecutive days of rapid gains. The domestic stock market is expected to show an upward trend." However, she added, "Given that the U.S. stock market plunged due to the shock of the mega-cap growth stock Meta's (-26.4%) stock price crash the previous day, and with the U.S. employment data scheduled for this evening, caution may weigh on the domestic stock market."