[Good Morning Stock Market] US Tech Stocks Rally... Will It Extend to Our Country?

On the 28th, the KOSPI index opened at 2,437.57, up 0.91% (22.04 points) from the previous trading day, as dealers were working in the Hana Bank dealing room in Euljiro, Seoul. The won-dollar exchange rate started at 1,306 won, down 7.3 won. Photo by Moon Honam munonam@

[Asia Economy Reporter Junho Hwang] On the 4th (local time), the U.S. stock market closed mixed amid concerns over an economic recession, a weaker U.S. dollar, and falling international oil prices. However, a tech stock-led rally was observed, drawing attention to whether this momentum will continue in the domestic stock market.

Various factors were digested in the U.S. stock market that day. Walmart, which had lowered its quarterly and annual earnings estimates last week due to a slowdown in consumption caused by surging food and energy prices, announced a restructuring, increasing concerns about a recession. Additionally, the Bank of England’s big step (a 0.5% interest rate hike) for the first time in 27 years also dampened investor sentiment. As a result, indices except for the Nasdaq (0.41%) closed lower: Dow (-0.26%), S&P 500 (-0.08%), and Russell 2000 (-0.13%).

The Nasdaq showed strength due to individual factors affecting tech stocks and the weaker dollar. Despite continued hawkish remarks from Federal Reserve (Fed) officials, the U.S. dollar weakened that day.

Sangyoung Seo, a researcher at Mirae Asset Securities, analyzed, "Market participants seem to have started paying more attention to data to confirm this interest rate hike trend, weakening the impact of Fed officials’ remarks." He added, "As this market change progressed, the dollar’s previously strong position weakened further." He also forecasted, "Attention is focused on the wage growth rate in the employment report to be released on the 5th (local time), as well as on data such as the consumer price index to be announced on the 10th next week."

The domestic stock market was also expected to show strength in tech stocks, similar to the U.S. market. Researcher Seo stated, "The continued improvement in the earnings of semiconductor-related stocks is expected to have a positive impact on investment sentiment."

Ji-young Han, a researcher at Kiwoom Securities, predicted, "Amid the strong performance of U.S. tech stocks, the market will show a firm upward trend while digesting the earnings results of major growth stocks such as Naver and Celltrion."

She further advised, "Although the rapid rotation centered on specific themes or stock groups in the domestic market, where there are no clear leading stocks recently, is a concerning factor, it is necessary to approach from a style perspective as an alternative, and at this point, an approach focusing on growth style is effective."