[Good Morning Stock Market] KOSPI Attempts to Stabilize Above 2800... Exchange Rate as a 'Variable'

The Korean stock market is expected to attempt to stabilize the KOSPI around the 2800 level this week (24th?28th), influenced by changes in semiconductor sector profits following Micron's earnings announcement. Accordingly, market participants in Korea are likely to focus their attention on Micron's earnings report scheduled for the 26th.

[Image source=Yonhap News]

Last week, despite political uncertainties in Europe, the domestic stock market saw the KOSPI rise by 0.94%, driven by new highs in the US stock market, strong performance of Nvidia, and gains in artificial intelligence (AI)-related stocks. Meanwhile, the KOSDAQ fell by 1.1% due to weakness in secondary battery stocks.

As major semiconductor stocks such as Nvidia experienced price corrections in the US market, the Nasdaq and S&P 500 indices, which had been hitting record highs consecutively, reversed and declined.

Han Ji-young, a researcher at Kiwoom Securities, analyzed, "On the 21st, the US stock market showed weakness due to divergent actions by central banks, hawkish remarks from Federal Reserve (Fed) officials, and profit-taking in AI stocks, leading to the emergence of profit-taking selling pressure. However, consumer goods sectors such as cosmetics and food & beverages, which had been adjusted since last week depending on export results up to the 20th, rebounded."

The Korean stock market is expected to be influenced by ▲the US May Personal Consumption Expenditures (PCE) price index and inflation expectations ▲the first presidential debate between Joe Biden and Donald Trump ▲earnings reports from major US companies such as FedEx and Nike ▲and changes in semiconductor sector profits following Micron's earnings, as it attempts to stabilize around the 2800 level.

Researcher Han Ji-young stated, "Although the KOSPI fell back to the 2700 level last Friday, whether it can stabilize at 2800 depends on the direction of semiconductor stocks like Samsung Electronics. Therefore, domestic market participants are expected to focus on this Micron earnings report."

The exchange rate is also an indicator to watch closely. If the exchange rate surpasses 1400 won, it could increase stock market volatility. Kim Ji-hyun, a researcher at KB Securities, noted, "With rising expectations for interest rate cuts, the KOSPI has risen for three consecutive weeks, while Nvidia declined for the first time in nine weeks, putting pressure on investor sentiment in tech stocks. The exchange rate movement, which exceeded 1390 won last week, will be important. A breakthrough of 1400 won is expected to act as a factor expanding volatility."