[Good Morning Stock Market] Mixed Trends Amid Fading US Interest Rate Cut Hopes... KOSPI Expected to Start Lower

The KOSPI is expected to start slightly lower on the 2nd.

On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 39,566.85, down 240.52 points (0.60%) from the previous session. The Standard & Poor's (S&P) 500 index fell 10.58 points (0.20%) to 5,243.77, while the Nasdaq index rose 17.37 points (0.11%) to 16,396.83.

The New York stock market closed mixed as stronger-than-expected economic data reduced expectations for interest rate cuts. However, large tech stocks such as Alphabet and Meta Platforms showed strength, helping the Nasdaq index to rebound late in the session.

The Institute for Supply Management (ISM) announced that the March manufacturing Purchasing Managers' Index (PMI) was 50.3. The US ISM manufacturing PMI exceeded 50 for the first time in 17 months. Additionally, the US Department of Commerce reported on the 29th that the core Personal Consumption Expenditures (PCE) price index rose 0.3% month-over-month in February.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) fell 0.8%. The MSCI Emerging Markets Index ETF rose 0.2%. Eurex KOSPI 200 futures increased by 0.2%. Considering this, the KOSPI is expected to open down by 0.1% to 0.3% on the day.

Han Ji-young, a researcher at Kiwoom Securities, said, "Today, the rise in US interest rates driven by the strong March ISM manufacturing PMI and inflation concerns will limit the index's upside." She added, "By sector, the Philadelphia Semiconductor Index, including Micron, is expected to strengthen due to increased demand forecasts for high-bandwidth memory (HBM), and the expanding expectations for China's economic recovery will create a differentiated market centered on semiconductor and Chinese consumer theme stocks."

It is analyzed that the decline in South Korea's exports is a regrettable aspect. South Korea's March exports, announced the previous day, grew by 3.1%, marking a slowdown in export momentum for two consecutive months since January. The figure fell short of the consensus of 4.2%, which is expected to negatively impact the stock market.

However, the researcher noted, "It is reassuring that the average daily export performance remains steady overall," and added, "The strong performance of new manufacturing orders in the US ISM and China's March manufacturing new orders, which precede South Korea's exports, is also positive."

He explained that although semiconductor export momentum has also slowed, export momentum remains valid due to expectations for new server demand creation, such as the $100 billion data center construction news by Microsoft and OpenAI.

Meanwhile, the one-month Non-Deliverable Forward (NDF) won/dollar exchange rate in New York was 1,353 won. Considering this, the won/dollar exchange rate is expected to start up by 3 won on the day.