[Good Morning Stock Market] Volatile Market Stabilizes... KOSPI Expected to Start Higher

[Image source=Yonhap News]

On the 8th, the KOSPI is expected to start with a slight upward trend as the volatile market stabilizes.

On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 34,152.60, up 56.74 points (0.17%) from the previous session. The Standard & Poor's (S&P) 500 index rose 12.40 points (0.28%) to 4,378.38, and the Nasdaq index closed at 13,639.86, up 121.08 points (0.90%) from the previous session.

The New York stock market rose that day, supported by strong demand in U.S. short-term bond auctions, a decline in market interest rates, and ongoing expectations of the end of tightening, despite hawkish remarks from Federal Reserve (Fed) officials.

Austin Goolsby, President of the Chicago Fed, stated that controlling inflation is the top priority, so they will not pre-judge interest rates. Fed Governor Michelle Bowman emphasized that if inflation progress stagnates in upcoming data, she would support a federal funds rate hike.

Meanwhile, led by big tech stocks, the S&P 500 closed higher for the seventh consecutive day, and the Nasdaq for the eighth consecutive day. Semiconductor and cloud companies that reported earnings that day presented a bright outlook for future growth. However, concerns over a global economic slowdown spread, and international oil prices hit their lowest level since mid-July.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) fell 1.64%, and the MSCI Emerging Markets Index ETF dropped 0.18%. Eurex KOSPI 200 futures declined 0.81%. Reflecting this, the KOSPI is expected to start up 0.3% to 0.6%.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, “The domestic stock market, which showed a volatile trend due to the short-selling ban, will gradually find a stable flow.” He added, “However, as concerns over the global economic slowdown and weak demand outlook spread, differentiated movements by stock and sector will appear.” He continued, “Ultimately, continuous interest in semiconductors, which have reduced burdens through deleveraging for over a year, is necessary,” and added, “From a supply-demand perspective, foreigners have recorded net purchases of more than 16 trillion won annually in the semiconductor sector.”

Han Ji-young, a researcher at Kiwoom Securities, analyzed, “The short-selling ban has made it difficult to gauge and respond to stock price direction. However, the alternative is to focus on existing fundamentals and macro issues such as corporate earnings outlooks obscured by the short-selling issue, interest rate changes, and the direction of the U.S. economy closely linked to KOSPI earnings, while responding to the current supply-demand volatility market.”

Meanwhile, the 1-month non-deliverable forward (NDF) USD/KRW exchange rate was 1,302.78 won, and reflecting this, the USD/KRW exchange rate is expected to start down 6 won.