[Good Morning Stock Market] US FOMC Caution... KOSPI's Upside Limited

On the 19th, the KOSPI is expected to show a differentiated stock price movement among sectors with limited upside due to cautious sentiment ahead of the U.S. Federal Open Market Committee (FOMC) meeting.

On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 38,790.43, up 75.66 points (0.20%) from the previous session. The S&P 500 rose 32.33 points (0.63%) to 5,149.42, and the Nasdaq closed at 16,103.45, up 130.27 points (0.82%).

At the New York stock market that day, Nvidia's Artificial Intelligence (AI) Developer Conference (GTC) attracted attention. Nvidia rebounded after four trading days ahead of the GTC meeting. Additionally, Alphabet and Apple showed strength on news that the iPhone is in talks to adopt Google's generative AI model, 'Gemini.'

The Federal Reserve's FOMC regular meeting scheduled for the 19th-20th was also a focus. Although the Fed is expected to keep interest rates unchanged at this meeting, concerns are growing that the Fed may not rush to cut rates due to increasing inflationary pressures recently. The probability of a rate cut in June, which was initially expected to be the first rate cut, has recently dropped to around 50%.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) rose 0.26%. The MSCI Emerging Markets ETF increased by 0.17%. Eurex KOSPI 200 futures fell 0.14%.

Han Ji-young, a researcher at Kiwoom Securities, said, "The market now needs to digest the Bank of Japan (BOJ) meeting, scheduled to be announced during the Asian trading session today, before the March FOMC." She added, "This BOJ meeting is expected to be a neutral event for the stock market, and after absorbing short-term price volatility, the market will focus on responding to the FOMC scheduled for Thursday."

On the previous day, the domestic stock market closed higher, showing strength centered on sectors with individual positive factors such as bio, shipbuilding, and chemicals, despite weakness in low price-to-book ratio (PBR) stocks due to last Friday's U.S. stock market correction, FOMC waiting sentiment, and profit-taking.

Han said, "Despite the strong U.S. stock market led by Tesla (6.3%) today, the index's upside will be limited as the market digests the BOJ meeting results amid cautious sentiment ahead of the March FOMC, showing differentiated stock price movements among sectors."

He added, "From a sector perspective, attention should be paid to AI and electric vehicle-related stocks. While AI momentum can be expected following the strength of Apple and the iPhone, after Nvidia unveiled the next-generation AI graphics processing unit (GPU), the GB200, in the GTC keynote after market close, selling pressure emerged, causing the stock price to show a slight decline in after-hours trading. Therefore, the domestic stock market is also expected to show mixed stock price movements in AI-related stocks."

Meanwhile, the one-month non-deliverable forward (NDF) won-dollar exchange rate in New York was 1,334.71 won, reflecting a likely 1 won increase at the start of trading in the won-dollar exchange rate.