[Good Morning Stock Market] US CPI Exceeds Expectations... KOSPI Expected to Start Lower

On the 11th, the KOSPI is expected to start lower due to the impact of the rise in the U.S. March Consumer Price Index (CPI) and the sharp increase in government bond yields.

The three major indices of the U.S. New York stock market all plunged on the 10th (local time) following the release of the March Consumer Price Index (CPI) that exceeded market expectations. On that day at the New York Stock Exchange (NYSE), the blue-chip-focused Dow Jones Industrial Average closed at 38,461.51, down 422.16 points (1.09%) from the previous trading day. The large-cap-focused S&P 500 index fell 49.27 points (0.95%) to 5,160.64, and the tech-heavy Nasdaq index dropped 136.28 points (0.84%) to 16,170.36.

The March CPI increase rate exceeded market forecasts for the third consecutive month, which is interpreted as a deterioration in investor sentiment. According to the U.S. Department of Labor's announcement that day, the March CPI rose 0.4% month-on-month and 3.5% year-on-year, surpassing expert estimates of 0.3% and 3.4%, respectively.

Han Ji-young, a researcher at Kiwoom Securities, explained, "This inflation shock is causing uncertainty regarding the timing and magnitude of the Federal Reserve's rate cuts," adding, "The U.S. 10-year Treasury yield has entered the 4.5% range, increasing macroeconomic instability." She continued, "With U.S. inflation experiencing shocks for three consecutive months, macro sensitivity has increased. However, the smooth start of the first-quarter earnings season, centered on semiconductors, and the improvement in profit forecasts are expected to provide downside rigidity to the stock market."

On the 9th, the day before the general election, the domestic stock market did not show significant fluctuations in both the KOSPI and KOSDAQ markets, reflecting caution over the general election and consumer prices, but closed lower. Hi Investment & Securities stated in a report that day, "With the U.S. March consumer prices exceeding market expectations and concerns about the timing of rate cuts increasing, the domestic stock market also needs to prepare for shocks."

The KOSPI is also expected to start lower due to the impact of the decline in the New York stock market. Kim Ji-won, a researcher at KB Securities, predicted, "Due to inflation shocks and the burden of the sharp rise in government bond yields, a lower start is expected domestically. However, strong earnings from TSMC and a rebound in Nvidia will support investor sentiment."

The possibility of policy changes has increased due to the opposition party securing a majority of seats in the general election, and the European Central Bank (ECB) monetary policy meeting was also cited as a variable that could affect the stock market.