[Good Morning Stock Market] US Stock Market Hits 'All-Time High', KOSPI Expected to Start Higher

As the U.S. stock market cheered the Federal Open Market Committee (FOMC) results and reached an all-time high, the domestic stock market is expected to start higher.

[Image source=Yonhap News]

On the 20th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 401.37 points (1.03%) from the previous trading day to close at 39,512.13. The large-cap S&P 500 index increased by 46.11 points (0.89%) to 5,224.62, and the tech-heavy Nasdaq index closed up 202.62 points (1.25%) at 16,369.41.

At the March FOMC meeting, the U.S. Federal Reserve (Fed) maintained its forecast for three rate cuts this year and announced it would soon slow the pace of bond purchases. The market, which had expected a hawkish (monetary tightening preference) stance at this meeting due to inflation and employment data exceeding expectations in January and February, welcomed the announcement.

Seokhwan Kim, a researcher at Mirae Asset Securities, explained, "Fed Chair Jerome Powell stated in the press conference that they would not overreact to the inflation data from January and February and that it would be appropriate to start easing rates at some point this year." He added, "However, he also emphasized the need for more data on further inflation declines."

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) rose 2.4%, and the Emerging Markets Index ETF increased by 1.1%. Eurex KOSPI 200 futures rose 1.0%. Considering this, the KOSPI is expected to start the day with a rise of around 1%.

Kim said that the domestic stock market could also benefit from the halo effect of Micron following Nvidia. He noted, "Last night, Micron Technology reported second-quarter earnings and guidance that exceeded market expectations, causing its shares to rise more than 14% in after-hours trading." He added, "In terms of supply and demand, foreign investors bought more than 1 trillion won worth of semiconductor stocks yesterday, switching from net selling to net buying on a monthly basis."

Jiyoung Han, a researcher at Kiwoom Securities, forecasted, "With hawkish concerns about the FOMC easing, growth stocks such as semiconductors and secondary batteries, as well as small and mid-cap semiconductor equipment stocks besides Samsung Electronics, could gain upward momentum, following the strength seen last week in cyclical stocks like power equipment, shipbuilding, and petrochemicals."

Meanwhile, the one-month Non-Deliverable Forward (NDF) USD/KRW exchange rate in New York stood at 1,330 won, reflecting an expected 11 won decline in the USD/KRW exchange rate at the start of trading.