[Good Morning Stock Market] Despite US Relief Rally... KOSPI Faces Currency and Supply-Demand Pressure

Last week, while the New York stock market rallied on relief due to lower-than-expected U.S. inflation data, domestic investors on the 23rd were observed to need a cautious approach following the previous week. Since the won-dollar exchange rate remains in the 1450 won range, there are opinions that both the exchange rate and supply-demand conditions need to be closely monitored.

Last week, all three major indices in the New York stock market closed higher. On the 20th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average, a group of blue-chip stocks, closed at 42,840.26, up 1.18% from the previous session. The S&P 500 index rose 1.09%, and the tech-heavy Nasdaq Composite index ended the day up 1.03%. This was the first time in 12 trading days that all three major indices rose. The easing of inflation concerns was due to the lower-than-expected November Personal Consumption Expenditures (PCE) price index.

Among the seven stocks in the large tech group known as the 'Magnificent 7,' four stocks including Nvidia rose, supporting the market. Nvidia increased by 3.08%, Apple by 1.88%, Alphabet (Google's parent company) by 1.54%, and Amazon by 0.73%. Microsoft (MS) fell 0.10%, Tesla dropped 3.46%, and Meta (Facebook's parent company) declined 1.73%.

Last week, the domestic stock market closed lower due to increased political uncertainty. The KOSPI closed at 2,404.15 on the 20th, down 1.30% from the previous trading day. The KOSDAQ ended at 668.31, down 2.35% from the previous session. In both markets, foreigners and institutions showed a net selling trend, while individuals defended the indices with net buying.

Concerns about exchange rate instability remain high. On the 20th, the won-dollar exchange rate was 1,451.40 won, down 0.34% from the previous session. Although the rise was limited due to strategic currency hedging caution by the National Pension Service, the dollar's strength continued as the Federal Open Market Committee (FOMC) event was digested.

Ji-won Kim, a researcher at KB Securities, said, "Over the weekend, a new temporary budget bill was signed by President Joe Biden, averting the feared U.S. government shutdown." He noted, "The U.S. Department of Commerce confirmed Samsung Electronics subsidies at $4.745 billion (approximately 6.9 trillion won), which is 26% lower compared to April." He added, "While the slowdown in U.S. inflation and easing shutdown concerns are positive, the domestic impact is limited, so it is necessary to monitor and respond by confirming the exchange rate and supply-demand conditions."