[Good Morning Market] US Stock Market Rise Effect... KOSPI Expected to Start Higher

On the 23rd, the KOSPI is expected to start higher due to positive momentum from the U.S. stock market. The decline in U.S. Treasury yields, along with gains in large tech stocks and semiconductors, is anticipated to have a positive effect.

[Image source=Yonhap News]

On the 29th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average, centered on blue-chip stocks, closed at a record high of 38,333.45, up 224.02 points (0.59%) from the previous session. The S&P 500 index, focused on large-cap stocks, rose 36.96 points (0.76%) to a new all-time high of 4,927.93. The tech-heavy Nasdaq index closed at 15,628.04, up 172.68 points (1.12%).

This week, the U.S. Federal Open Market Committee (FOMC) meeting is scheduled to take place. At the January FOMC meeting, the benchmark interest rate, currently at 5.25?5.5%, is expected to remain unchanged. Investors are closely watching for any hints from Jerome Powell, Chair of the U.S. Federal Reserve (Fed), regarding the future path of interest rates at this first FOMC meeting of the year. Such messages could provide clues about the timing and pace of future rate cuts.

Big tech companies will also release their earnings this week. On the 30th, Microsoft (MS) and Alphabet will report, followed by Apple, Amazon, and Meta on the 1st of next month.

The domestic stock market saw intensified capital concentration yesterday, mainly in low price-to-book ratio (PBR) stocks. By investor type, individuals sold a net 726.7 billion KRW, while individuals and foreigners bought net 547.6 billion KRW and 216.1 billion KRW, respectively.

On the 30th, the Korean stock market is also expected to start higher, buoyed by positive momentum from the U.S. The continued net buying by foreigners in the KOSPI market is also a positive factor.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "The U.S. stock market extended gains and hit new highs following news that the Treasury reduced its funding size for Q1 (January?March) by about 55 billion dollars compared to last October," adding, "We expect the KOSPI to start up 0.1?0.3%."

Kim Ji-won, a researcher at KB Securities, noted, "Yesterday, there was strength and concentration mainly in low PBR stocks and sectors expected to benefit from domestic corporate value-up programs," adding, "Meanwhile, the fact that foreigners have been net buyers of the KOSPI for seven consecutive trading days is also positive, and differentiation by index and sector is expected to continue."

Daishin Securities advised increasing the proportion of leading stocks by utilizing volatility from the early 2400 level. Lee Kyung-min, a researcher at Daishin Securities, said, "From a price perspective, gradual weight increases in semiconductors and shipbuilding sectors are effective at current price levels, and we recommend increasing weights in internet stocks during corrections," adding, "Secondary batteries and pharmaceuticals/biotech should adopt trading strategies limited to short-term trading."