[Good Morning Stock Market] Increased Volatility in Oil-related Stocks... Foreign Investors' Supply and Demand on Alert

[Image source=Yonhap News]

On the 4th, the domestic stock market is expected to fluctuate depending on foreign investors' supply and demand trends amid increased volatility in oil-related stocks, which had surged the previous day.

On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 38,571.03, down 115.29 points (0.30%) from the previous session. The S&P 500 index rose 5.89 points (0.11%) to 5,283.40, and the Nasdaq index closed at 16,828.67, up 93.65 points (0.56%).

The New York stock market ended mixed amid concerns over economic slowdown due to weak U.S. Institute for Supply Management (ISM) manufacturing Purchasing Managers' Index (PMI), despite optimism about artificial intelligence (AI) from major companies such as Nvidia and Apple.

The ISM announced that the manufacturing PMI for May was 48.7, below the market forecast of 49.6 compiled by The Wall Street Journal (WSJ). It also declined from the April figure of 49.2, indicating economic contraction.

On the other hand, Nvidia's stock price rose more than 4% that day. CEO Jensen Huang unveiled the next-generation AI graphics processing unit called 'Rubin' for the first time and announced plans to produce it in 2026. Additionally, AMD CEO Lisa Su announced at the Computex Tech Expo held in Taipei, Taiwan, that the advanced accelerator 'Instinct MI325X' is planned to be released within the year.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) rose 1.7%, and the MSCI Emerging Markets Index ETF increased by 1.1%. Eurex KOSPI 200 futures fell 0.5%.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "The domestic stock market's strength the previous day was positively influenced by strong exports, manufacturing rebound, and improved supply and demand," adding, "It will be important to see whether foreign investors continue to prefer risk assets despite the weak U.S. manufacturing PMI."

Han Ji-young, a researcher at Kiwoom Securities, predicted, "Today, the domestic stock market will show a differentiated trend between AI and growth stocks and economically sensitive stocks due to mixed upward and downward factors from the U.S., such as interest rate declines following weak ISM data and economic uncertainty noise."

Another researcher pointed out, "The sharp drop in international oil prices due to reduced production cuts by oil-producing countries and concerns over weak demand could be a downside factor for domestic refining stocks," adding, "However, since these stocks are grouped as oil field theme stocks mentioned by the government, it is necessary to be cautious as intraday fluctuations and supply-demand volatility may increase significantly today."