[Good Morning Market] Philadelphia Semiconductor Index Strengthens... KOSPI Expected to Start Higher

On the 9th, the KOSPI is expected to start with an increase of around 0.5%. Although the New York stock market was flat the previous day, the strong performance of the Philadelphia Semiconductor Index is analyzed to be favorable for the domestic stock market.

On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 32,798.40, down 58.06 points (0.18%) from the previous session. The Standard & Poor's (S&P) 500 index rose 5.64 points (0.14%) to 3,992.01, and the Nasdaq index closed at 11,576.00, up 45.67 points (0.40%) from the previous session.

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The New York stock market started higher due to a rebound buying following the previous day's decline but showed increased volatility, including a drop immediately after remarks by Jerome Powell, Chairman of the U.S. Federal Reserve (Fed). Powell appeared before the Senate the previous day and mentioned, "The terminal rate may be higher than previously expected."

However, the decline was limited by solid employment data. The U.S. Department of Labor reported 10.82 million JOLTS job openings in January, slightly below expectations. Nevertheless, this figure significantly exceeds the pre-COVID-19 pandemic level of 7 million, and the ratio of job openings to unemployed persons in January remained high at 1.9, which was interpreted as a positive signal.

By sector, the semiconductor industry rose due to expected benefits from the growth of the artificial intelligence (AI) industry, while electric vehicle companies such as Tesla underperformed. Nvidia, AMD, and Micron rose 2-3%, while Tesla fell more than 3%.

On the day, the Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) rose 0.27%, and the MSCI Emerging Markets Index ETF increased by 0.41%. Accordingly, the KOSPI is expected to start with an increase of around 0.5%.

Seosangyoung, a researcher at Mirae Asset Securities, analyzed, "Although the New York stock market fluctuated around the flat range during the day as it digested Fed Chairman Powell's remarks, the Philadelphia Semiconductor Index's 2.67% gain, driven by the semiconductor sector's benefit from the AI industry, is positive for the domestic stock market." He also explained, "Although Fed Chairman Powell continued hawkish remarks, the Fed's Beige Book and the employment data released that day showed a slowdown in wage growth, raising expectations that the Fed's aggressive policy changes may not be significant, which is also favorable." He added, "The domestic stock market is expected to start higher and show strength centered on individual stocks such as Apple-related shares and semiconductors."

Han Ji-young, a researcher at Kiwoom Securities, analyzed, "In the domestic stock market, the price momentum is expected to differ among IT-related stocks including semiconductors and AI, as well as other stock groups." She added, "Additionally, market attention will focus on whether there will be increased price and supply-demand volatility in secondary battery and entertainment stocks, which have recently emerged as leading stocks in the short term due to supply-demand concentration and shareholding competition issues."