[Good Morning Stock Market] KOSPI Lacks Rebound Momentum... Expected to Start Lower

On the 26th, the KOSPI is expected to start lower. The lack of clear rebound momentum, along with the delayed improvement in the business conditions of semiconductor and secondary battery-related stocks, which hold significant weight in the domestic market, is likely to have an impact.

[Image source=Yonhap News]

On the 25th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average, centered on blue-chip stocks, closed at 33,035.93, down 105.45 points (0.32%) from the previous trading day. The S&P 500 index, focused on large-cap stocks, recorded 4,186.77, down 60.91 points (1.43%). The Nasdaq index also closed at 12,821.22, down 318.65 points (2.43%).

The New York stock market was affected by weak earnings in technology stocks. Alphabet's Q3 revenue and profit, announced after the market closed the previous day, exceeded expectations, but concerns about weakness in the cloud division were confirmed, causing the stock price to drop more than 9%. Apple fell 1.35%, Tesla 1.89%, and Amazon 5.58%, showing overall weakness in technology stocks. Major semiconductor stocks such as NVIDIA, AMD, and Intel also saw declines of 4-5%.

Additionally, Middle East risks and rising government bond yields were negative factors. News that Israel is preparing for a ground offensive had an impact. The 2-year Treasury yield rose about 2 basis points (1bp=0.01 percentage points) to 5.13%, while the 10-year and 30-year Treasury yields rose 13bp and 15bp, respectively, reaching 4.96% and 5.09%.

On this day, the Korean stock market is also expected to start down by about 1 to 1.5%, influenced by the decline in the U.S. stock market. Kim Seok-hwan, a researcher at Mirae Asset Securities, explained, "The domestic market will face strong additional downward pressure as it fails to find clear rebound momentum. The rising exchange rate and absence of foreign demand will further increase downward pressure."

Han Ji-young, a researcher at Kiwoom Securities, also said, "The Nasdaq's sharp drop of more than 2% in the U.S. was largely due to Alphabet. This is a factor that could burden the domestic market as well, as the disappointment came from the AI business sector, which had high expectations, causing the plunge."

She added, "Recently, the market has experienced relatively frequent daily fluctuations, and intraday volatility has also increased frequently, making it difficult to respond. Short-term stock price volatility is expected to inevitably expand."