[Good Morning Stock Market] US Treasury Yields Soar... "KOSPI Expected to Start Lower"

[Image source=Yonhap News]

On the 18th, the KOSPI is expected to start down 0.5% as concerns over prolonged high U.S. interest rates are reflected.

On the 17th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 34,474.83, down 290.91 points (0.84%) from the previous session. The S&P 500, focused on large-cap stocks, ended at 4,370.36, down 33.97 points (0.77%), and the tech-heavy Nasdaq closed at 13,316.93, down 157.70 points (1.17%).

The 10-year U.S. Treasury yield rose to 4.31% that day, the highest level since 2008. Inflation is not falling as quickly as expected. Additionally, positive economic indicators have strengthened expectations that interest rates will not decline rapidly.

Seosangyoung, a researcher at Mirae Asset Securities, said, "The U.S. stock market started higher due to rebound buying following recent declines and confidence in the economy supported by solid economic indicators," but added, "Strong indicators, along with hawkish Fed expectations following the previous day, led to rising interest rates, which burdened the stock market."

The domestic stock market is also expected to start lower. Han Jiyoung, a researcher at Kiwoom Securities, said, "Due to concerns over high interest rates stemming from the U.S.'s solid growth rate, inflation uncertainty, and Fed tightening outlook, along with the Nasdaq's sharp decline, there will be downward pressure mainly on growth stocks, leading to a lower start."

However, the biotech sector is expected to show a differentiated trend. He explained, "The biotech sector is expected to exhibit differentiated stock price movements reflecting the merger issue of Celltrion Group shares announced after the previous day's market close."

He also advised paying attention to the Chinese stock market. This is because expectations for expanded economic stimulus remain valid, as the People's Bank of China announced the maintenance of reasonable liquidity and a 'precise and strong' policy. Researcher Seosangyoung said, "After the related news was delivered, the Chinese stock market turned upward before the previous day's close," adding, "There were gains in Chinese companies in the U.S. stock market," and emphasized, "The Korean stock market will fluctuate according to changes in the Chinese stock market."