[Good Morning Stock Market] Rising Oil Prices and Ex-Dividend Day... "KOSPI Expected to Show Volatile Market"

New York Stock Market Closes Strong
Semiconductor and IT Stocks Like Intel and AMD Rise
International Oil Prices Surge 2.5% Posing Pressure

[Image source=Yonhap News]

The Korean stock market is expected to start lower on the 27th. Although it will be positively influenced by the strong performance of the U.S. stock market the previous day, the mechanical index adjustment effects caused by rising international oil prices and domestic ex-dividend dates are expected to have a greater impact.

On the previous day (local time), the U.S. stock market closed higher, supported by positive news in individual IT sectors such as Intel (+5.2%), expectations for interest rate cuts, and hopes for a soft economic landing. On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 37,545.33, up 0.43% (159.36 points) from the previous session. The Standard & Poor's (S&P) 500 index rose 0.42% (20.12 points) to 4,774.75, and the Nasdaq index increased 0.54% (81.60 points) to 15,074.57.

Looking at individual stocks, Intel (+5.2%), AMD (+2.7%), Alphabet (+0.02%), Meta (+0.41%), Tesla (+1.61%), and Nvidia (+0.92%) all closed higher. Amid the generally quiet atmosphere in global financial markets due to the Christmas holiday, the Russell 2000 index, which focuses on small- and mid-cap stocks, stood out with a 1.24% gain, supported by expectations of falling inflation and a soft economic landing.

However, the Korean stock market is expected to show volatility after a lower start. This is because the Yemeni Houthi rebels attacked ships passing through the Red Sea again, causing international oil prices to rise 2.5% compared to the previous session. A sharp rise in international oil prices can lead to inflation. Last week, international oil prices rose about 3% following trade disruptions caused by attacks from the Houthi rebels.

Today being the ex-dividend date is also expected to have an impact. The ex-dividend date for listed companies that set December 31 as the dividend record date is the 27th. Investors who purchase stocks by this date are entitled to receive dividends from companies with December fiscal year-ends. If stocks are purchased after the dividend record date, the right to receive dividends is lost. Therefore, stock prices generally decline on ex-dividend dates.

Han Ji-young, a researcher at Kiwoom Securities, assessed, "During intermittent consolidation phases, a strategy to increase exposure to IT sectors such as semiconductors and AI, as well as AI-themed stocks, remains valid."

Han also stated, "Although there is a possibility of temporary increased volatility in foreign investors' supply and demand due to short-term overheating concerns around year-end and early January, and changes in supply and demand after the ex-dividend date related to dividend arbitrage trading, considering next year's expected turnaround in Korea's annual export growth (currently around -7% this year) and a favorable foreign exchange market environment, their net buying trend is unlikely to be easily disrupted."