[Good Morning Stock Market] "Burden of Breaking Previous Highs... Some Profit-Taking Should Also Be Considered"

[Image source=Reuters Yonhap News]

On the 20th, regarding the domestic stock market, securities firms analyzed that "due to the lack of catalysts caused by the US stock market holiday, some profit-taking may occur due to the burden of breaking the previous high."

On the 19th (local time), the New York stock and bond markets were closed in observance of Juneteenth, the day commemorating the emancipation of slaves. The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) rose 0.91%, and the MSCI Emerging Markets Index ETF increased by 0.92%. Eurex KOSPI 200 futures fell by 0.04%.

Regarding the domestic stock market that day, Kiwoom Securities researchers Han Ji-young and Kim Ji-hyun stated, "The market has already priced in a soft landing of the economy, a lowered upper bound of market interest rates, and the possibility of one rate cut within the year." They added, "With the US market closed and no new catalysts, semiconductor investment sentiment is expected to continue recovering, but profit-taking may occur due to the burden of breaking the previous high. Buying momentum in the semiconductor sector led to profit-taking in food and beverage and cosmetics."

They further explained, "Although secondary batteries rebounded, the rebound is unlikely to continue due to bankruptcy reports of the US electric vehicle startup Fisker and concerns over demand slowdown. The weakening of individual buying contrasted with strong buying by foreigners and institutions, which soon implies strength in large-cap stocks. Factors such as the Donghae gas field, data centers and nuclear power plants, the import of Romanian K9 self-propelled howitzers, and Indian IPOs also act as positive catalysts for large-cap stocks, which is favorable for the index."

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "The KOSPI has broken through the upper bound of the box range for the first time in 28 months, laying the groundwork for further gains." He added, "Centered on the semiconductor industry, which leads the global economy, South Korea's export performance is rapidly improving, spreading expectations for top-line growth. This will drive a re-rating of the KOSPI index."

Meanwhile, the 1-month Non-Deliverable Forward (NDF) USD/KRW exchange rate in New York was 1,379.99 won, and the KRW/USD exchange rate is expected to start the day down by 2 won.