[Good Morning Stock Market] US Tesla Surges... KOSPI Expected to Start Higher

[Image source=Yonhap News]

On the 3rd, the KOSPI is expected to start higher, supported by the strong performance of the New York stock market and dovish remarks from Jerome Powell, Chairman of the U.S. Federal Reserve (Fed).

On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 39,331.85, up 162.33 points (0.41%) from the previous session. The S&P 500 rose 33.92 points (0.62%) to 5,509.01, and the Nasdaq Composite increased by 149.46 points (0.84%) to close at 18,028.76.

The strength in the New York market was attributed to Powell's comments. At the European Central Bank (ECB) forum held in Sintra, Portugal, Powell said, "The latest indicators and those preceding them suggest that we are somewhat on a disinflation path," adding, "We have made significant progress in bringing inflation back toward our target."

Powell's remarks came as recent inflation data showed consecutive signs of slowing. With May inflation figures indicating a deceleration, Fed officials have continued to make dovish statements favoring monetary easing.

Additionally, Tesla surged more than 10% after reporting second-quarter delivery numbers that exceeded market expectations, driving the market higher. Supported by Tesla's rise, the consumer discretionary sector of the S&P 500 climbed 1.8%, and the financial sector rose 1.1%, led by JP Morgan's consecutive record-high rallies.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) rose 0.1%, and the MSCI Emerging Markets Index ETF increased by 0.3%. Eurex KOSPI 200 futures gained 0.7%. Considering these factors, the KOSPI is expected to start slightly higher on the day.

Kim Seok-hwan, a researcher at Mirae Asset Securities, analyzed, "The domestic stock market is expected to see a rebound buying following the previous day's decline," adding, "Especially, the KOSDAQ index has recently been pushed down to the lower bound of its three-month box amid worsening supply and demand conditions, which strengthens the case for technical support and a rebound."

However, he added, "The upward momentum of secondary batteries, which have a significant weight and role in the KOSDAQ market, is not yet trend-sustaining, which is likely to limit the extent of the rebound."

Han Ji-young, a researcher at Kiwoom Securities, stated, "Considering the entry into the small- and mid-cap earnings season after August and the low burden of KOSDAQ credit balances, the possibility of another large-scale supply and demand outflow is low," and analyzed, "Ultimately, since interest rate and supply-demand issues are a matter of time, it is necessary to refrain from building additional downside positions on the KOSDAQ."

Meanwhile, the one-month non-deliverable forward (NDF) USD/KRW exchange rate in New York stood at 1,384.4 won. Reflecting this, the USD/KRW exchange rate is expected to start about 3 won lower on the day.