[Good Morning Market] US Semiconductor Stocks Rally... KOSPI Expected to Open Slightly Higher

Yonhap News

On the 17th, the KOSPI is expected to move within a firm range as concerns over the rising won-dollar exchange rate and the strength of U.S. semiconductor stocks coincide.

On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 43,717.48, down 110.58 points (0.25%) from the previous session. The S&P 500 index rose 22.99 points (0.38%) to 6,074.08, and the Nasdaq Composite index jumped 247.17 points (1.24%) to 21,738.9.

The New York stock market closed mixed amid caution ahead of the U.S. Federal Open Market Committee (FOMC) meeting, a slowdown in the rising interest rate trend due to weak December manufacturing Purchasing Managers' Index (PMI), and a continued concentration on individual tech stocks with positive news such as Tesla (6.1%), Alphabet (3.5%), Broadcom (11.2%), and Micron (5.6%).

Recently, the U.S. stock market has shown a persistent concentration on M7 (Big Tech) stocks, failing to spread gains broadly. This is attributed to macroeconomic uncertainties ahead of the December FOMC. The market consensus expects a hawkish rate cut in December followed by a hold in January, with the Chicago Mercantile Exchange (CME) FedWatch tool indicating over a 70% probability of a rate hold in January.

Experts have pointed to Trump-related risks and strengthening U.S. economic momentum as factors that could slow the pace of rate cuts. However, the impact of Trump’s policies on inflation is likely to become significant only in the second half of next year.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) fell 0.73%, and the MSCI Emerging Markets (EM) ETF declined 0.53%.

The domestic stock market started higher on the previous day, buoyed by news of the approval of the impeachment vote over the weekend, but ended mixed due to concerns over the December FOMC, weak Chinese economic indicators, a rising dollar-won exchange rate, and rising U.S. interest rates.

Han Ji-young, a researcher at Kiwoom Securities, predicted, “Today, despite the continued burden from the level of the won-dollar exchange rate driven by December FOMC caution (currently in the 1,435 won range), the strong performance of the Philadelphia Semiconductor Index led by Micron, which surged on earnings expectations on the 18th (local time), and limited expansion of domestic political uncertainty will coexist as upward and downward factors, resulting in a firm box range movement.”

Meanwhile, the New York Non-Deliverable Forward (NDF) 1-month contract traded at 1,436.1 won, up 0.14% from the previous day.