[Good Morning Stock Market] KOSPI Expected to Start Slightly Higher... Sector-Differentiated Market Trends

[Image source=Yonhap News]

On the 5th, the KOSPI is expected to start higher, with a differentiated market among stocks anticipated.

On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 38,989.83, down 97.55 points (0.25%) from the previous session. The S&P 500 fell 6.13 points (0.12%) to 5,130.95, and the Nasdaq dropped 67.43 points (0.41%) to 16,207.51.

The New York stock market showed mixed performance with stock-specific price differentiation, widening losses due to profit-taking near the close, and ended near the intraday lows. Nvidia rose more than 6% intraday, offsetting weakness in other major tech stocks such as Apple, Tesla, and Alphabet, but trimmed gains in the late session due to profit-taking.

This week, ahead of Federal Reserve Chairman Jerome Powell’s congressional testimony and the employment report, the market appears to be taking a breather. However, major Wall Street investment banks (IBs) including Bank of America are raising their target prices for the S&P 500 index this year.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) rose 1.0%. The MSCI Emerging Markets Index ETF fell 0.2%. Eurex KOSPI 200 futures increased by 0.1%. Considering this, the KOSPI is expected to start in a firm-to-strong range.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, “The continuous net buying by foreigners is expected to increase the upside potential of the domestic stock market,” adding, “The key to foreign net buying lies in semiconductors and beneficiaries of value-upgrading, while a conservative view on secondary batteries is expected to continue.”

Han Ji-young, a researcher at Kiwoom Securities, predicted, “Today, despite the rally in artificial intelligence (AI) stocks such as Nvidia (3.6%) and Super Micro (18.7%), and the simultaneous strength in major cryptocurrencies like Bitcoin, the overall U.S. market is expected to show a pause, with short-term profit-taking pressure leading to a stagnant index and a differentiated market among stocks.”

Han added, “From an industry perspective, Tesla (-7.2%) plunged due to news that its China shipments last year dropped about 19% because of the Lunar New Year (Chunjeol) base effect and demand slowdown, which is likely to constrain investment sentiment in domestic secondary battery stocks that had recently been bottoming out.”

He also noted, “Apple (-2.5%) showed weakness following news that the European Union (EU) imposed a fine of 1.84 billion euros, about 0.5% of its global sales, for abusing its dominance in the music streaming app market, which is expected to increase supply-demand volatility in domestic Apple-related stocks.”

Meanwhile, the one-month non-deliverable forward (NDF) won-dollar exchange rate in New York stood at 1,330 won. Considering this, the won-dollar exchange rate is expected to start 2 won lower compared to the previous day.