[Good Morning Stock Market] Semiconductor Investment Sentiment Worsens... KOSPI Expected to Decline

On the 31st, the KOSPI is expected to start lower due to deteriorating investor sentiment in the semiconductor sector.

On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 40,743.33, up 203.40 points (0.50%) from the previous session. The S&P 500 index fell 27.10 points (0.50%) to 5,436.44, and the Nasdaq Composite index plunged 222.78 points (1.28%) to close at 17,147.42.

That day, the Nasdaq index hit its lowest level in eight weeks amid weakness in major semiconductor companies such as Nvidia and Qualcomm. The semiconductor sector dropped more than 5%, weighing down the index. In contrast, the energy, financial, and real estate sectors showed strength.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) fell 0.8%, and the MSCI Emerging Markets Index ETF declined 0.5%. Eurex KOSPI 200 futures closed down 0.8%. Considering this, the KOSPI is expected to start lower that day.

Kim Seok-hwan, a researcher at Mirae Asset Securities, analyzed, “Investor sentiment toward semiconductors has worsened mainly in the New York stock market, likely leading to net foreign selling. However, attention should be paid to whether Samsung Electronics’ confirmed earnings and investor relations (IR) presentations during the session will limit downward pressure.”

There is also analysis that the market will focus on the results of the July Federal Open Market Committee (FOMC) meeting. Although the possibility of a rate cut at this meeting is slim, the market has already priced in a rate cut in September, making it a key point to watch whether Jerome Powell, Chair of the Federal Reserve (Fed), will send dovish (monetary easing-favoring) signals to the market.

Furthermore, the direction of the yen-dollar exchange rate after the Bank of Japan (BOJ)’s July meeting, whose results are scheduled to be announced during the session, is also considered important.

Han Ji-young, a researcher at Kiwoom Securities, explained, “The background behind last week’s decline in major global stock markets included not only uncertainty over the U.S. presidential election and concerns about AI profitability but also worries about yen carry trade liquidation due to the yen’s sharp appreciation. However, even if the yen strengthens further after the actual BOJ meeting results, the likelihood of the stock market undergoing a correction is relatively low.”

He forecasted, “Today, the domestic stock market will show volatility. Since there are both upward and downward factors surrounding AI and semiconductor stocks, frequent fluctuations in the supply and demand of these stocks are expected during the session.”