[Good Morning Stock Market] US Semiconductor Strength... KOSPI Expected to Start Higher

[Image source=Yonhap News]

On the 24th, the KOSPI is expected to start slightly higher, supported by the strong performance of the semiconductor sector in the New York stock market.

On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 34,472.98, up 184.15 points (0.54%) from the previous session. The Standard & Poor's (S&P) 500 index rose 48.46 points (1.10%) to 4,436.01, and the Nasdaq index closed at 13,721.03, up 215.16 points (1.59%) from the previous session.

The New York stock market recorded gains as concerns about the economy surfaced due to weak manufacturing and services PMI, causing a sharp drop in Treasury yields. Additionally, growing expectations for the artificial intelligence (AI) industry ahead of Nvidia's earnings announcement contributed to the strength of technology stocks.

Nvidia rose 3.17% ahead of its earnings report, while Microsoft, Alphabet, Meta, AMD, and Super Micro Computer also showed strong performances. Supported by this, the Philadelphia Semiconductor Index closed up 2.11%. Notably, Nvidia surged 7% after the market closed, highlighting the growth of the AI industry given the sharp increase in data center sales.

On the same day, the Morgan Stanley Capital International (MSCI) Korea Index ETF rose 1.27%, and the MSCI Emerging Markets Index ETF increased by 1.59%. Eurex KOSPI 200 futures rose 0.41%. Considering these factors, the KOSPI is expected to start about 0.5% higher.

Seosangyoung, a researcher at Mirae Asset Securities, analyzed, "The New York stock market's strength, led by technology stocks such as semiconductors based on the sharp drop in Treasury yields, will have a positive impact on the domestic market." He added, "Furthermore, the weak dollar is expected to lead to a stronger Korean won, which is also favorable." However, he noted, "The weak manufacturing and services PMI data released today for the U.S. and Eurozone highlight the possibility of economic slowdown, which is a burden. Especially, the clear signs of recession in the European region will limit the index's rise."

Kim Jihyun, a researcher at Kiwoom Securities, stated, "Funds are expected to flow into the semiconductor sector, supported by Nvidia's earnings surprise." He added, "If the semiconductor-led trend does not continue, the market will remain more sensitive to interest rates and will show direction only after confirming the results of the Jackson Hole meeting." He further explained, "Even if Fed Chair Powell continues to make hawkish remarks, an additional rate hike in September would be a burden for the Federal Reserve at this point. This is because, regardless of the retail sales surprise, the weak earnings of retail companies, which reflect the real economy, indicate that the issue of reduced consumer spending power will become more prominent in the second half of the year."