[Good Morning Stock Market] "KOSPI Expected to Start Higher... Focus on Semiconductor Sector"

The U.S. stock market closed higher on the 22nd (local time) due to bargain buying amid the recent correction and easing geopolitical tensions. The photo shows Iranian Foreign Minister Hossein Amir-Abdollahian (second from the right) visiting the site of the bombing in Syria on the 8th (local time). [Image source=Yonhap News]

Overnight, the U.S. stock market closed higher due to bargain buying following a recent correction and easing geopolitical tensions, leading to expectations that the domestic market will also show strength on the 23rd.

The three major indices of the New York Stock Exchange (NYSE) all closed higher as the market was relieved by the easing of tensions in the Middle East. On the 22nd (local time) at the NYSE, the Dow Jones Industrial Average rose 0.67% compared to the previous trading day. The S&P 500, focused on large-cap stocks, and the Nasdaq, centered on tech stocks, closed up 0.87% and 1.11%, respectively.

Some of the representative tech stocks from the 'Magnificent (M7)' group rebounded, lifting the Nasdaq index. Nvidia, which had plunged 10% the previous day amid concerns over weakness in the semiconductor sector, rose more than 4%. Amazon.com and Alphabet A also jumped over 1%.

The Iranian Foreign Minister stated in an interview with NBC that "the conflict with Israel will not be escalated," which is interpreted as a partial easing of geopolitical tensions. Earlier this month, both countries had continued attacks against each other. On the 1st, the Israeli military bombed the Iranian consulate in Syria, killing seven Iranians including senior commanders of the Iranian Revolutionary Guard Corps. In retaliation, Iran launched over 300 drones and missiles against mainland Israel on the 13th and 14th. Israel responded with a counterattack on the 19th, bombing the Isfahan region in Iran, which houses nuclear facilities and military bases.

Safe-haven asset prices also showed stability. On the New York Commodity Exchange (COMEX), June gold futures closed at $2,346.4 per ounce, down $67.4 (-2.79%) from the previous session, marking the lowest level in a month with nearly a 3% drop. Oil prices also regained a stable trend. Silver prices, which had been volatile, stabilized as well.

The domestic stock market, which had sharply declined mainly in the semiconductor sector the previous day, is also expected to start today with a slight gain. Mirae Asset Securities forecast that the KOSPI will open 0.4% to 0.7% higher.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "The domestic market rose an average of 6% in the financial sector yesterday due to government expectations of additional incentives for the 'Value-Up Program.' However, the strength of foreign net buying is not as strong as when the program was announced in January, so further gains may be limited."

He added, "The improvement in investor sentiment following the rebound in the U.S. stock market is expected to have a positive impact on the domestic market. Attention should be paid to the ‘Buy back’ in semiconductors, where nearly 900 billion won of foreign net selling was concentrated yesterday."