[Good Morning Stock Market] Will Foreign Investors' Love Calls Continue... KOSPI Expected to Start Flat

[Image source=Yonhap News]

Amid mixed closing in the U.S. stock market overnight, the domestic stock market is expected to start flat on the 9th. Foreign investors have maintained a 'buy' stance for seven consecutive trading days until the previous day, and selective buying is expected to continue in industries and stocks with undervalued appeal.

The three major U.S. indices closed mixed on the 9th (local time). This was influenced by declines in tech stocks and hawkish (monetary tightening preference) remarks from Federal Reserve (Fed) officials. Rising government bond yields also weighed on the stock market.

At the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 39,056.39, up 0.44% from the previous trading day. The S&P 500 index fell 0.1% to 5,187.67, and the Nasdaq index dropped 0.18% to 16,302.76.

By stock, Uber fell 5.72%. On the day, Uber announced that its first-quarter revenue increased 15% year-on-year to $8.82 billion, while its net loss widened more than fourfold to $654 million (a net loss of $0.32 per share). Tesla declined 1.74% amid news that U.S. prosecutors are investigating whether it committed securities and wire fraud by misleading investors regarding its autonomous driving system.

The path of interest rates remains uncertain. Susan Collins, President of the Boston Federal Reserve Bank, stated that it may take a long time for inflation to reach the Fed's 2% target. In a speech at the Massachusetts Institute of Technology (MIT), she said, "The recent surprise increases in (economic) activity and inflation suggest a strong need to maintain policy at the current level until we have greater confidence that inflation is moving steadily toward 2%." Fed Chair Jerome Powell also said at a press conference following the Federal Open Market Committee (FOMC) meeting on the 1st that "it will take longer than expected to gain confidence that inflation is on a sustainable path toward 2%."

The KOSPI reclaimed the 2,740 level, supported by foreign net purchases exceeding 390 billion won the previous day. Foreigners net bought 395.2 billion won in the securities market, marking seven consecutive trading days of net buying. On the same day, the KOSDAQ also regained the 870 level with net buying by individuals, closing slightly higher.

The domestic stock market is expected to start within a flat range on the day. Kim Seok-hwan, a researcher at Mirae Asset Securities, explained, "The reason foreign net buying has continued recently is due to the high valuation appeal of the domestic stock market. Also, estimated operating profits for this year are significantly improving compared to last year, centered on core industries such as semiconductors, and the preference for risk assets has increased amid abundant liquidity." He added, "Differentiated selection toward industries and companies with strong quantitative and qualitative momentum is likely to expand."