[Good Morning Stock Market] Kospi Expected to Trade Firm Amid US Stock Rally

Last Week's Overreaction to Samsung Electronics' 3% Drop Diagnosed

Last week, the New York stock market closed higher, led by a sharp rally in IT stocks such as Nvidia, and the KOSPI is expected to start slightly higher on the 27th.

On the 24th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 39,069.59, up 0.01%. The S&P 500 rose 0.70% to 5,304.72, and the Nasdaq Composite Index closed at 16,920.79, up 1.10%. The Nasdaq index hit an all-time high.

On that day, buying interest was concentrated on major IT companies including Nvidia. Nvidia rose 2.57%, continuing its strong performance from the previous day. The seven major tech stocks known as the 'Magnificent 7 (M7)' mostly rose. Apple increased by 1.66%, Meta Platforms by 2.7%, Microsoft (MS) by 0.74%, and Alphabet A by 0.83%. Meanwhile, Amazon fell 0.17%. Outside the M7, relatively smaller companies like Intel rose 2.1%, and Advanced Micro Devices also increased by 3.7%.

The durable goods orders (products usable for more than three years) announced on the 24th revealed the strength of the U.S. market. According to the U.S. Department of Commerce, April durable goods orders, seasonally adjusted, increased by 0.7% from the previous month to $284.1 billion. Consumer sentiment sharply declined, and indicators showed higher expected inflation. According to the University of Michigan, the final consumer sentiment index reflecting consumer confidence in the U.S. economy for May was 69.1, down 10.5% from 77.2 in the previous month.

The KOSPI closed at 2,687.6 on the 24th, down 1.26% from the previous session, affected by retreating expectations for U.S. interest rate cuts. Institutions and foreigners both showed net selling, with 853.2 billion KRW and 382.6 billion KRW sold respectively, maintaining a 'sell' stance. In particular, Samsung Electronics, the largest market cap leader, dropped 3.07%. The KOSDAQ index closed down 0.85% at 839.41.

Mirae Asset Securities expects the KOSPI to start up 0.3~0.6%. Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "Although Samsung Electronics fell more than 3% intraday last Friday due to reports of a failure in passing the quality test of HBM3E for Nvidia, it is likely to be an overreaction," adding, "Even if some defects were found, they can be sufficiently resolved through consultations with Nvidia. Looking at May alone, foreign net buying of SK Hynix was stronger, but on an annual basis, Samsung Electronics still holds the advantage, which should not be overlooked."