[Good Morning Stock Market] "KOSPI Expected to Start Downward Focused on Large-Cap Stocks"

On the 8th, the KOSPI is expected to start lower, led by large-cap stocks such as semiconductors.

[Image source=Yonhap News]

The previous day, the three major indices of the U.S. New York stock market closed mixed in a narrow range. The New York market, which started higher on hopes for a rate cut, paused after Federal Reserve (Fed) officials hinted at possible rate hikes.

On the 7th (local time) at the New York Stock Exchange (NYSE), the blue-chip-focused Dow Jones Industrial Average closed at 38,884.26, up 31.99 points (0.08%) from the previous trading day. The large-cap S&P 500 index rose 6.96 points (0.13%) to 5,187.7, while the tech-heavy Nasdaq index fell 16.69 points (0.1%) to 16,332.56.

On the same day, Neil Kashkari, president of the Minneapolis Federal Reserve Bank and known as a hawkish (favoring monetary tightening) Fed official, stated that he does not rule out the possibility of a rate hike. Speaking at the ‘Milken Global Conference 2024’ held at the Beverly Hilton Hotel in Los Angeles (LA), he said, "I believe there is a high need for interest rates to remain at the current level for an extended period." He added, "Until we confirm the effects of monetary policy, it is likely that rates will stay at this level much longer than we or the public currently expect," and explained, "Although it is not the most likely scenario, we cannot exclude the possibility of a rate hike."

The domestic stock market surged the previous day, supported by large-scale simultaneous net buying by foreigners and institutions. The expanded expectations for a Fed rate cut due to U.S. employment slowdown on the 3rd and the strength of semiconductor stocks such as Micron positively influenced investor sentiment.

However, on the 8th, the KOSPI is expected to start lower, centered on semiconductor stocks such as Samsung Electronics and SK Hynix, which showed strength the previous day.

Han Ji-young, a researcher at Kiwoom Securities, said, "Today, mixed movements in the dollar and interest rates due to hawkish remarks by some Fed officials, along with weakness in U.S. AI stocks such as Nvidia (-1.7%), are expected to trigger profit-taking after yesterday’s sharp rise, leading to a lower start focused on large-cap stocks like semiconductors."

Kim Ji-won, a researcher at KB Securities, said, "The market showed mixed performance as expectations for a rate cut within the year, maintained by attention to weakening employment and Fed Chair Jerome Powell’s remarks excluding rate hikes, diverged. Although the Dow index rose for five consecutive trading days, its upward momentum slowed, and the domestic market needs to prepare for profit-taking pressure following yesterday’s sharp rise."