[Good Morning Stock Market] "Impeachment Motion Passed... Domestic Market Expected to Ease Political Uncertainty"

The impeachment vote against President Yoon Suk-yeol was passed on the weekend of the 14th. The domestic stock market, which had shown significant volatility until now, is expected to rise due to the easing of political uncertainty.

On the 14th, the vote counting for the impeachment motion against President Yoon Seok-yeol is underway in the National Assembly plenary session. Photo by Kim Hyun-min

According to the financial investment industry on the 16th, the impeachment motion against President Yoon Suk-yeol was conducted in the National Assembly plenary session with all 300 members present. It was passed with 204 votes in favor, 85 against, 3 abstentions, and 8 invalid votes. This is the third time in constitutional history that an impeachment motion against a sitting president has been passed. The first was former President Roh Moo-hyun in 2004, followed by former President Park Geun-hye in 2016.

The securities industry expects the passage of this impeachment motion to strengthen the safety of the KOSPI. Lee Jae-man, a researcher at Hana Securities, explained, "The domestic stock market is expected to continue its index rebound based on the recent price merits following the parliamentary approval of the presidential impeachment motion."

Lee added, "This year, the Morgan Stanley Capital International (MSCI) Korea index in dollar terms has fallen by as much as 26% from its yearly high. Considering that, excluding past phases such as the global financial crisis, advanced countries' fiscal crises, the COVID-19 pandemic, and the Federal Reserve's interest rate hikes, the index has fallen at least 13% and up to 27% from its peak, it is judged that the price correction has been sufficiently carried out."

Lee Kyung-min, a researcher at Daishin Securities, also said, "With the interest rate cut cycles of major global countries still effective, solid U.S. economic momentum, visible recovery in the Chinese economy, expected European interest rate level-down, and securing economic stability, the KOSPI is expected to form an upward trend, escaping its previous sluggishness, supported by strengthened external fundamental drivers, liquidity momentum, and stable downward pressure on the dollar."

Yang Hae-jung, a researcher at DS Investment & Securities, analyzed, "Although momentum needs to be observed further, foreigners can start buying simply by the removal of political risk triggering a value trigger. Once foreign buying resumes, the KOSPI may experience a selling gap."

Meanwhile, on the 13th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 43,828.06, down 86.06 points (0.20%) from the previous trading day. The S&P 500 closed at 6,051.09, down 0.16 points (0.00%), and the Nasdaq Composite Index closed up 23.88 points (0.12%) at 26.72.

In particular, the securities industry views the Federal Open Market Committee (FOMC) regular meeting of the U.S. Federal Reserve (Fed), scheduled for the 17th-18th of this month, as the biggest event. Wall Street expects the Fed to cut interest rates at this meeting.

Han Ji-young, a researcher at Kiwoom Securities, forecasted, "After the December FOMC scheduled during the week, it would be appropriate to focus on macro and earnings events such as changes in the Fed's monetary policy path next year, earnings announcements from Micron, and changes in earnings estimates and foreign demand for domestic semiconductor stocks like Samsung Electronics and SK Hynix."

Kim Ji-won, a researcher at KB Securities, also explained, "This week, major countries' monetary policy meetings including the FOMC, the Bank of England (BOE), and the Bank of Japan (BOJ) are scheduled. Many indicators such as the U.S. Personal Consumption Expenditures (PCE) price index and Gross Domestic Product (GDP) are also pending." He added, "It is important to watch whether Broadcom's strong earnings will lead to a semiconductor stock rally in the domestic stock market, and the Micron earnings report on the 19th is also significant. Although political risk has somewhat eased and an upward trend is expected to continue, domestic and external uncertainties remain, so volatility may expand again."