[Good Morning Market] US Stock Market Mixed... KOSPI Expected to Start Slightly Lower

New York Stock Market Weakens on Hawkish FOMC Minutes
KOSPI Starts Lower... Focus on AI, ChatGPT, and Semiconductors

[Asia Economy Reporter Jang Hyowon] On the 23rd, the KOSPI is expected to start the session with a 0.2~0.5% decline as the US New York stock market showed mixed trends following the release of the Federal Open Market Committee (FOMC) minutes.

On the 22nd (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,045.09, down 84.50 points (0.26%) from the previous session. The Standard & Poor's (S&P) 500 index fell 6.29 points (0.16%) to 3,991.05, while the Nasdaq index rose 14.77 points (0.13%) to close at 11,507.07.

[Image source=Yonhap News]

The New York stock market opened higher on rebound buying following the previous day's decline. Early in the session, the market showed a drop influenced by hawkish remarks from James Bullard, President of the Federal Reserve Bank of St. Louis, advocating for a rapid increase in interest rates to the terminal level, but it soon recovered.

Subsequently, buying continued until the release of the FOMC minutes, showing a limited upward trend. However, after the hawkish minutes were disclosed, the dollar strengthened further and the decline in Treasury yields narrowed, dampening investor sentiment.

On the previous day, the Morgan Stanley Capital International (MSCI) Korea Index ETF fell by 1.06%, and the MSCI Emerging Markets Index ETF dropped by 0.57%. Accordingly, the KOSPI is expected to start with a decline of around 0.2~0.5%.

Kim Seokhwan, a researcher at Mirae Asset Securities, said, “The domestic stock market is expected to start weak as the New York stock market digests the FOMC minutes and shows mixed trends. However, we also expect bargain hunting following the previous day’s decline.” He added, “In particular, the limited decline despite the rise in the dollar index and US Treasury yields, along with the fact that the won-dollar exchange rate actually fell, suggests that risk asset preference may continue.”

Han Jiyoung, a researcher at Kiwoom Securities, said, “Volatility is expected as the hawkish February FOMC minutes and the morning Monetary Policy Committee results are digested. However, technical buying following the sharp short-term drop the previous day is expected to support the index’s downside.” She added, “It is important to note that Nvidia, which announced earnings after the US market close, recorded an earnings surprise driven by strong performance in the gaming and artificial intelligence (AI) business sectors, causing an after-hours surge of around 8%. This is expected to contribute to improved investor sentiment in related stocks such as AI, ChatGPT, and semiconductors, which have recently faced a short-term correction phase.”

Meanwhile, the New York Non-Deliverable Forward (NDF) won-dollar exchange rate for one month stood at 1,301.93 won, reflecting an expected 4 won decline at the start of trading in the won-dollar exchange rate.