[Good Morning Stock Market] Continued Impact of Weak US Stock Market... KOSPI Expected to Remain Flat

Stock Market Sluggish Due to Previous Day's Low PBR Stock Sell-Off
US Market Weakness and Persistent Inflation Pressure Continue on the 21st

[Image source=Yonhap News]

On the 20th, the KOSPI, which had been sluggish due to profit-taking selling in the price-to-book ratio (PBR) sector, is expected to show limited movement on the 21st as well, influenced by the weak U.S. stock market.

On the 20th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 38,563.80, down 0.17% from the previous session. The S&P 500 index fell 0.60% to 4,975.51, and the Nasdaq index dropped 0.92% to 15,630.78.

The stock price of Nvidia, which is scheduled to announce earnings on the 21st, fell more than 4% that day, worsening overall market investor sentiment. Although Nvidia, the leading AI stock, is expected to record all-time high earnings, the valuation burden has increased due to its steep price rise so far.

The minutes of the Federal Reserve's (Fed) January Federal Open Market Committee (FOMC) regular meeting will also be released the following day. Experts expect the minutes to suggest that the Fed will maintain a cautious stance on interest rate cuts this year.

The U.S. Leading Economic Index for January recorded 102.7, down 0.4% from the previous month. This was worse than the market expectation of a 0.3% decline and the previous month's 0.2% drop.

The KOSPI is expected to show limited movement amid ongoing inflationary pressure from rising oil prices and the weak U.S. stock market. There is also a possibility of cautious behavior ahead of the government's 'Corporate Value-Up Program' announcement scheduled for the 26th.

Labor Gil, a research fellow at Shinhan Investment Corp., said after the market closed the previous day, "Since the KOSPI price recovery was rapid, a breather market may occur," adding, "Inflation due to rising oil prices remains a lingering risk." He further stated, "However, the most important price-to-earnings ratio (PER) and earnings per share (EPS) trajectories are not negative," and "I believe the upward trend can continue ahead of next week's Value-Up Program announcement."