[Good Morning Stock Market] Focus on US Powell's Remarks... KOSPI Expected to Start Lower

[Image source=Yonhap News]

On the 25th, the KOSPI is expected to start with a decline of around 1%, influenced by the New York stock market's drop as it awaited remarks from Jerome Powell, Chairman of the U.S. Federal Reserve (Fed).

On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 34,099.42, down 373.56 points (1.08%) from the previous session. The Standard & Poor's (S&P) 500 index fell 59.70 points (1.35%) to 4,376.31, and the Nasdaq index dropped 257.06 points (1.87%) to close at 13,463.97.

That day, the New York stock market opened higher, buoyed by Nvidia's strong earnings and announcement of share buybacks. However, it turned downward during the session as profit-taking intensified ahead of Chairman Powell's Jackson Hole conference. In particular, the dollar's strength and rising interest rates led to relatively larger declines in major tech stocks and the semiconductor sector. The Philadelphia Semiconductor Index showed a decline of over 3%.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) fell 0.06%, and the MSCI Emerging Markets Index ETF dropped 0.38%. Eurex KOSPI 200 futures declined by 1.09%. Considering this, the KOSPI is expected to start the day down by about 1%.

Seosangyoung, a researcher at Mirae Asset Securities, said, "Despite Nvidia's strength in the New York stock market, the surrender of gains and the emergence of selling pressure centered on semiconductor and other tech stocks pose a burden on the domestic market," adding, "The domestic market is expected to start down around 1%, with foreign investors leading the process of absorbing selling pressure."

Kim Jihyun, a researcher at Kiwoom Securities, analyzed, "Weakness in tech stocks and the anticipation of the Jackson Hole meeting results to be released over the weekend are causing profit-taking selling pressure. After the previous day's rebound centered on semiconductors, secondary batteries, internet, and bio sectors sensitive to interest rates, the key question is whether the market will continue to shift from a theme-driven market sensitive to news to a leading stock market after the Jackson Hole meeting results."

Researcher Kim Jihyun explained, "According to a report released by the Bank of Korea the day before, the number of Chinese visitors to Korea in the second half of the year is expected to reach 2.2 million, showing an 85% recovery compared to 2019. Group tours of Chinese tourists have resumed from this week, and it is expected to become more visible during the Chinese National Day holiday from September 29 to October 6. Therefore, continuous interest in airport and downtown duty-free shops, department stores, and hotel sectors is necessary."