[Good Morning Stock Market] US Stocks Rise on Optimism for Interest Rate Cuts... KOSPI Expected to Start Higher

With expectations of a Federal Reserve (Fed) interest rate cut maintained, the New York stock market closed higher, leading to a forecast that the KOSPI will start higher on the 19th.

[Image source=Reuters Yonhap News]

On the 18th (local time), the S&P 500 index, centered on large-cap stocks at the New York Stock Exchange (NYSE), closed up 0.45% at 4740.56. The Dow Jones Industrial Average closed flat at 37,306.02, while the Nasdaq index rose 0.61% to 14,904.81. Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "Despite remarks from Fed officials that put the brakes on excessive expectations for rate cuts, the U.S. stock market's momentum to continue rising played a significant role."

By individual stocks, big tech shares showed notable gains. Meta rose 2.9%, Alphabet (Google) jumped 2.50%, continuing the strength of the Magnificent Seven companies. Netflix closed up 3% after Morgan Stanley raised its target price by 16% to $550. U.S. steel company US Steel surged 26% on news of being acquired by Nippon Steel. On the other hand, Apple (-0.85%) fell after announcing that sales of the Apple Watch Series 9 and Ultra 2 will be suspended online starting the 21st and offline stores from the 24th due to a patent dispute. By sector, telecommunications (1.9%), consumer staples (1.1%), and consumer discretionary (0.8%) were strong, while real estate (-0.4%), utilities (-0.3%), and financials (0%) were weak.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) rose 0.39%, while the MSCI Emerging Markets Index ETF fell 0.05%. Eurex KOSPI 200 futures dropped 0.27%.

Kim Ji-hyun, a researcher at Kiwoom Securities, said, "The impact of Fed officials' remarks was limited, and supported by the rise in the U.S. stock market centered on big tech, the domestic market is expected to start higher." She added, "In addition to the existing leading stocks such as secondary batteries and semiconductors, biotech showed notable strength. Other sectors showing strength included shipping, which is expected to benefit from rising freight rates due to geopolitical risks, and newly listed large-cap affiliated stocks targeting pension funds and passive inflows (Ecopro MPT, LS Materials, Doosan Robotics)."

Researcher Kim said, "Regarding the relaxation of major shareholder requirements, after the National Assembly plenary session budget discussion on the 20th, the revised capital gains tax major shareholder criteria will be announced," adding, "If the year-end stock holding ratio per stock expands from the existing 1 billion KRW to 3 billion to 5 billion KRW, a concentration phenomenon toward KOSDAQ and newly listed stocks may occur."

Meanwhile, the one-month Non-Deliverable Forward (NDF) won-dollar exchange rate was 1,301.72 KRW, reflecting a forecast that the won-dollar exchange rate will start 5 KRW higher.