[MarketING] "KOSPI Expected to Fluctuate Between 2600 and 2720... Eyes on US CPI"

Stocks related to artificial intelligence (AI) and those with low price-to-book ratios (PBR) have shown an upward trend, and this week’s expected range for the KOSPI (March 11-15) is anticipated to be between 2600 and 2700. Securities firms advise paying close attention to the consumer price index (CPI) trends, which will be announced ahead of the March meeting of the U.S. Federal Open Market Committee (FOMC).

On the 8th, the stock market opened with the KOSPI rising more than 30 points from the start. At the Hana Bank dealing room in Myeongdong, Seoul, employees are working while the electronic board displays the KOSPI market status. Photo by Heo Younghan younghan@

According to the Korea Exchange on the 10th, the KOSPI index closed last week at 2680.35, up 1.43% from the previous week. Sectors with low PBR, such as banking and automobiles, showed strength. After the government announced value-up measures, low PBR sectors initially saw disappointing sell-offs, but as foreign investors’ sentiment recovered, they provided upward momentum to the stock market.

Hwang Junho, a researcher at Sangsangin Securities, said, "Last week, the Korean stock market showed an upward trend centered on semiconductor stocks following the announcement on the 1st, a holiday, of the expanded growth in semiconductor exports for February." He added, "At the same time, the semiconductor sector further expanded its gains influenced by the ongoing AI rally in the U.S. stock market due to increased demand for AI servers."

This week, major U.S. economic indicators that affect our stock market are scheduled to be released one after another. Indicators such as the U.S. February CPI, producer price index (PPI), and retail sales, which could increase market volatility, will be disclosed.

Moon Namjung, a researcher at Daishin Securities, stated, "If the results of February’s CPI, PPI, and expected inflation reflect the seasonality of winter (December to February), the rate of increase will slow down but show more rigidity than before." He forecasted, "If February’s CPI headline remains at the previous month’s level and the core CPI (excluding energy and food) shows a slowdown, the expectation for an interest rate cut, which had been pushed back to June, could be brought forward."

There is also a forecast that the shareholder meetings and value-up programs concentrated this month could act as positive factors for investor sentiment. Kim Younghwan, a researcher at NH Investment & Securities, explained, "Additional policy momentum related to the value-up programs scheduled for the first half of this year and the shareholder meeting season concentrated in March are factors that raise investors’ expectations."

In this environment, opinions have been raised that a market dominated by leading stocks will continue. Yoo Myungkan, a researcher at Mirae Asset Securities, predicted, "In Korea, where changes in earnings momentum are not significant, a narrow box-range movement is expected," adding, "The market dominated by existing leading stocks will continue."

NH Investment & Securities suggested a KOSPI expected band of 2600 to 2720 for this week. Researcher Kim Younghwan cited factors driving the market’s rise, including expectations for AI growth, easing concerns over U.S. inflation, improvement in Korea’s exports, and anticipation of corporate value-up programs. However, he noted that bubble concerns in the U.S. stock market and disappointment over China’s Two Sessions could act as downward pressures on the index.