[Good Morning Stock Market] Awaiting US Event... KOSPI Expected to Start Flat

On the 22nd, the KOSPI is expected to move within a narrow range ahead of the release of the U.S. Federal Open Market Committee (FOMC) minutes and Nvidia's earnings announcement.

On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 39,872.99, up 66.22 points (0.17%) from the previous session. The S&P 500 rose 13.28 points (0.25%) to 5,321.41, and the Nasdaq Composite increased by 37.75 points (0.22%) to 16,832.62. Both the Nasdaq and S&P 500 set new all-time closing highs.

The New York stock market was driven higher by AI momentum fueled by expectations for Nvidia's earnings and Microsoft (MS) unveiling new products. Additionally, Federal Reserve (Fed) Governor Christopher Waller's remarks that inflation is not accelerating and that further rate hikes are unnecessary supported the market's strength.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) and MSCI Emerging Markets Index ETF each fell by 0.6%. Eurex KOSPI 200 futures declined by 0.2%. Considering this, the KOSPI is expected to fluctuate within a narrow range on the day.

Kim Seok-hwan, a researcher at Mirae Asset Securities, analyzed, "Recently, the domestic stock market has entered a 'period adjustment' at major technical resistance levels amid no clear supply and demand direction from foreigners and institutions." He added, "Exports have significantly increased since early this month until the 20th, mainly driven by semiconductors (45.5%), but much of this appears to have been priced in by the stock market." He further noted, "It is necessary to pay attention to movements following Nvidia's earnings announcement."

The market is focusing on the May FOMC minutes to be released early on the 23rd and Nvidia's earnings. There is analysis that the May FOMC minutes could alter the consensus on the first rate cut timing, which is currently expected in September. Although the market felt relief after the May FOMC, most Fed officials have since expressed caution about rate cuts, making the degree of disagreement in this minutes release a key point to watch.

Han Ji-young, a researcher at Kiwoom Securities, explained, "While the FOMC minutes are important, domestic and international market participants currently seem to place more weight on Nvidia's earnings." She added, "Following the previous rally, there is renewed expectation that Nvidia will break through the $1,000 level, which it had not surpassed before, as it set a new high based on the previous day's closing price, but there are also concerns."

She said, "Volatility in semiconductor stocks centered on Nvidia is likely to increase after the earnings announcement. However, even if Nvidia-driven price and supply-demand instability materializes, it is expected to be short-lived and will not have a significant negative ripple effect on the overall domestic stock market."

Meanwhile, the one-month non-deliverable forward (NDF) USD/KRW exchange rate in New York stands at 1,362 won. Considering this, the USD/KRW exchange rate is expected to start the day down by 3 won.