[Good Morning Stock Market] KOSPI Expected to Start Higher on NASDAQ Strength

Uncertainty Remains Over US Debt Ceiling Agreement Passing Congress
Impact of North Korea's Space Launch Vehicle Launch News Likely Minimal

On the 31st, the domestic stock market is expected to start with a decline of around 0.3%.

On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,042.78, down 50.56 points (0.15%) from the previous session. The Standard & Poor's (S&P) 500 index rose 0.07 points (0.00%) to 4205.52, while the Nasdaq index closed at 13,017.43, up 41.74 points (0.32%) from the previous session.

Nvidia's stock price closed at $401.11, up 2.99% from the previous trading day. During the session, it rose to $419.38, an all-time high. Nvidia's stock price has surged more than 180% just this year. Tesla's stock price rose 4.14% on news that CEO Elon Musk visited China for the first time in over three years. China is Tesla's second-largest market after the United States.

[Image source=Yonhap News]

Sangyoung Seo, a researcher at Mirae Asset Securities, diagnosed, "Thanks to the strength of Nvidia and Tesla, the US Nasdaq at one point showed a 1.4% increase, but the appearance of profit-taking selling and the subsequent surrender of gains is a burden on the Korean stock market."

Researcher Seo explained, "In particular, the reason for the rise in Nvidia and Tesla was already reflected in the Korean stock market the day before, which is also a factor in the overall weakening of investor sentiment," adding, "Concerns about economic slowdown were highlighted as international oil prices fell sharply, which is also a burden." He further added, "Additionally, the rise in gold and bond prices and the strength of the yen, indicating a preference for safe-haven assets, were negative factors."

However, he analyzed that expectations for the won's appreciation are positive for foreign investor demand. Especially, the key issue is whether the recent active net buying by foreigners in the semiconductor sector will continue. Considering this, the domestic stock market is expected to decline by around 0.3% initially, followed by a focus on foreign investor demand as the market digests selling pressure.

Jiyoung Han, a researcher at Kiwoom Securities, said, "The domestic stock market closed higher the previous day, supported by large-scale net buying by foreigners amid expectations of a US debt ceiling agreement over the weekend, with strength centered on artificial intelligence (AI) and semiconductor stocks," and predicted, "Today, despite uncertainties about the US debt ceiling and geopolitical factors such as the space launch news delivered early this morning, the market is expected to show an upward trend influenced by the strength of the US Nasdaq."

From an industry perspective, attention is focused on the possibility of a short-term price pullback due to profit-taking in AI and semiconductor-related stocks, which have shown a sharp rise since last week.

Researcher Han forecasted, "In the US stock market, electric vehicle and electric vehicle charging-related stocks such as Tesla and Ford showed simultaneous strength supported by individual positive factors like Musk's visit to China. This is expected to act as a factor improving investor sentiment for electric vehicle charging and secondary battery-related stocks in the domestic market, where sector rotation is anticipated today."