[Good Morning Stock Market] US Stocks Close Mixed Before Holiday... KOSPI Expected to Start Slightly Higher

As the U.S. stock market closed mixed ahead of the Martin Luther King Jr. Day holiday, the KOSPI is expected to start on a firm note on the 15th.

[Image source=Yonhap News]

On the 12th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed down 0.31% (118.04 points) at 37,592.98. The S&P 500 rose 0.08% (3.59 points) to 4,783.83, and the Nasdaq increased by 0.02% (2.57 points) to 14,972.76. The U.S. Producer Price Index (PPI) for December last year, released that day, showed a three-month consecutive easing trend, but major companies’ Q4 earnings were weak, resulting in a mixed close for the U.S. stock market.

The decline in wholesale prices lowered concerns about inflation. It suggested a downward trend in the Consumer Price Index (CPI) passed on to consumers. Seokhwan Kim, a researcher at Mirae Asset Securities, said, "The pressure of slowing inflation has raised expectations that the U.S. Federal Reserve (Fed) will cut interest rates." The U.S. financial markets were closed that day in observance of Martin Luther King Jr. Day.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) fell 0.3%, while the MSCI Emerging Markets ETF rose 0.4%. Eurex KOSPI 200 futures increased by 0.1%. Accordingly, the KOSPI is expected to start on a firm note.

Jaehwan Heo, a researcher at Eugene Investment & Securities, said, "The global stock market at the beginning of the year has entered a consolidation phase after the Santa rally that took place since the end of October last year," adding, "Compared to global markets including the U.S., the weakness of the Korean stock market stands out. Expectations for upward revisions of domestic corporate earnings this year have not strengthened." He continued, "Unlike U.S. big tech stocks such as Nvidia, which directly benefit from the artificial intelligence (AI) boom, domestic semiconductor companies are burdened with inventory. Although the semiconductor industry has passed its worst phase, inventory remains high," and added, "It will take time for earnings to recover sharply. The domestic stock market is expected to underperform compared to global markets."

Meanwhile, the one-month non-deliverable forward (NDF) won-dollar exchange rate was at 1,311.40 won, reflecting a projected 3 won decline at the start of trading in the won-dollar exchange rate.