[Good Morning Stock Market] KOSPI Likely to See Trump Beneficiary Stocks and Earnings-Driven Market Trends

On the 11th, the KOSPI is expected to rally individual stocks based on the Q3 earnings season results along with the potential benefits from Trump. Given the heightened volatility and the fact that foreign investors have withdrawn for 11 consecutive weeks, there is also a recommendation to focus on shipbuilding, defense, and utility sectors, which are of interest to foreign investors.

On the 8th (local time), the U.S. New York stock market saw the S&P 500 and Dow Jones Industrial Average reach record highs. It is evaluated that the expectation of pro-business moves by President-elect Donald Trump lifted the market. On the New York Stock Exchange (NYSE), the Dow closed at 43,988.99, up 259.65 points (0.59%) from the previous session. The S&P 500 ended the day at 5,995.54, up 22.44 points (0.38%), having even surpassed 6,000 intraday. Additionally, the tech-heavy Nasdaq Composite closed at 19,286.78, up 17.32 points (0.09%).

By individual stocks, the Trump trade continued. Tesla surged 8.2%, and Trump Media & Technology jumped 15.2%. Notably, Tesla’s market capitalization reached $1.031 trillion, surpassing the $1 trillion mark for the first time in three years since October 2021. Meanwhile, cryptocurrency exchange Coinbase rose 5.93% on prospects of regulatory easing.

Last week, the KOSPI closed at 2,561.15, down 0.14% from the previous trading day. The KOSDAQ index ended at 743.38, down 1.34%. Foreign investors have continued net selling on the KOSPI for 11 consecutive weeks, offloading stocks worth 14.8 trillion KRW.

Currently, in the domestic stock market, it is seen that the search for Trump beneficiary stocks along with Q3 earnings announcements will significantly influence stock prices. It is expected that an individual stock market will unfold amid increased volatility.

Joon-ki Cho, a researcher at SK Securities, said, "This week, the focus will likely remain on distinguishing between Trump beneficiary and adversely affected stocks," adding, "Last week, when Trump mentioned Korean shipbuilding stocks, their prices surged dramatically, and such narrative-driven sharp reactions in stock prices are expected to continue."

However, he added, "Since exchange rates and interest rates are already largely priced in, there might be short-term additional surges, but the room for such moves is limited," and "I believe the overall domestic market supply and demand is unlikely to be significantly negatively impacted."

Daejun Kim, a researcher at Korea Investment & Securities, also noted, "This week, the Korean stock market is expected to fluctuate in line with movements in the broader financial markets and economic trends of various countries," adding, "While investor sentiment is not bad due to the strong U.S. stock market, China is facing continuous price declines and deflationary pressures, so expectations for economic momentum revival are weak."

He continued, "Ultimately, industries related to the economy are likely to be excluded from market choices when selecting investment targets," and "In the current situation, focusing on the flow of money could be an appropriate response." Especially since overseas liquidity is important, he emphasized the need to increase investment weight in shipbuilding, defense, and utilities, sectors where foreign investors began buying last week.