[Good Morning Stock Market] Impeachment Vote D-1... KOSPI Likely to Remain Weak Today

"Careful Approach Needed in Impeachment Political Situation"

Reform New Party lawmaker Lee Ju-young, Cheon Ha-ram floor leader, Innovation Party lawmaker Shin Jang-sik, Progressive Party floor leader Yoon Jong-oh, Basic Income Party representative Yong Hye-in, Social Democratic Party representative Han Chang-min, and Democratic Party lawmaker Kim Yong-min submitted the impeachment motion against President Yoon Seok-yeol jointly proposed by six opposition parties to the National Assembly's Legislative Affairs Office on the 4th. Photo by Kim Hyun-min

As the vote on the impeachment motion against President Yoon Suk-yeol is scheduled for the afternoon of the 7th, the domestic stock market on the 6th is expected to remain cautious. Experts unanimously agreed that a conservative approach is necessary for the time being as foreign investors continue to withdraw from the Korean stock market.

The three major indices of the U.S. New York stock market all closed lower on the 5th (local time). The Dow Jones Industrial Average, centered on blue-chip stocks, closed at 44,765.71, down 248.33 points (0.55%) from the previous trading day. The S&P 500, focused on large-cap stocks, fell 11.38 points (0.19%) to 6,075.11, and the Nasdaq Composite, centered on tech stocks, dropped 34.86 points (0.18%) to 19,700.26.

By individual stocks, Bitcoin fell below $100,000, dragging down cryptocurrency-related stocks. Cryptocurrency exchange Coinbase dropped 3.13%, and MicroStrategy, which holds the largest amount of Bitcoin among listed companies, declined 4.83%. Bitcoin traded above $100,000 in the morning Eastern Time but was at around $99,010 as of 4:35 p.m. that day.

The domestic stock market closed lower the previous day amid increased political uncertainty following the declaration and lifting of martial law. The KOSPI closed at 2,441.85, down 0.90% from the previous session. It started slightly higher by 0.3% but soon reversed and widened losses. During the session, it fell more than 1%, dropping below the 2,440 level. The KOSDAQ also closed down 0.92% at 670.94. The USD/KRW exchange rate rose 5.0 won to 1,415.1 won. Notably, sectors related to government-led projects such as Daewang Whale and nuclear power plants, G2G (defense industry), value-up sectors like finance and automobiles, and travel and airline stocks showed marked weakness.

On this day, the domestic stock market is expected to show weakness amid political uncertainty ahead of the impeachment vote. The Democratic Party plans to push for a plenary session vote on the impeachment motion against President Yoon Suk-yeol on the 7th. Cho Seung-rae, the chief spokesperson, told reporters after a Supreme Council meeting at the National Assembly on the 5th, "The vote on the impeachment motion against President Yoon will take place around 7 p.m. on the 7th."

Kim Ji-won and Lim Jeong-eun, researchers at KB Securities, evaluated, "The domestic stock market has fallen for two consecutive days due to political uncertainty, with foreign selling pressure and a weak Korean won continuing, resulting in a lack of rebound momentum." They added, "With the impeachment vote scheduled for the 7th, a cautious stance is expected to be highlighted. It seems inevitable that the stock market will continue to be linked to political uncertainty for the time being, and a conservative approach is necessary."

Kang Jin-hyuk and Lee Jae-won, researchers at Shinhan Investment Corp., also analyzed, "Political risks such as the declaration and lifting of martial law and the presidential impeachment crisis act as short-term downward factors," adding, "This is because there is a strong cautious stance after panic selling mainly by foreigners." They continued, "After absorbing short-term panic selling, fundamentals become important, but the situation is challenging with downward revisions to KOSPI earnings estimates. In the impeachment crisis, cautious approaches are needed for sectors where doubts about business continuity arise and domestic sectors expected to suffer from weakened consumer sentiment due to prolonged social unrest."