[Good Morning Stock Market] Focus on Tonight's US Employment Data Results... KOSPI's Heightened Caution

HSBC Suggests Increasing Korea Exposure
KOSPI Faces Resistance at Upper Levels, Entering Deliberation Phase

On the 10th, the Korean stock market is expected to show volatility as it awaits the results of the U.S. employment report released that day. The U.S. stock market was closed on the 9th (local time) due to the state funeral of former President Jimmy Carter, and the bond market also closed early at 2 p.m.

Depending on the U.S. employment report results, both the bond market and the stock market are expected to be significantly affected. The employment report released last August reflected concerns about a recession, causing the Nasdaq to fall by 2.43%.

Sangyoung Seo, a researcher at Mirae Asset Securities, explained, "The market expects the nonfarm payrolls to have decreased from 227,000 announced last month to 153,000," adding, "The unemployment rate is expected to be higher than market expectations at 4.3%, and wages are projected to have slowed." In other words, depending on the results, volatility in the dollar, interest rates, and the stock market could increase.

Meanwhile, the 12-month forward operating profit forecast for the KOSPI has been revised downward from around 309 trillion won at the end of last year to around 306 trillion won. The semiconductor sector also dropped from around 75 trillion won to 72 trillion won. Nevertheless, foreign investors have net purchased about 1.8 trillion won in the KOSPI since January 3.

Jiyoung Han, a researcher at Kiwoom Securities, analyzed, "As HSBC suggested increasing Korea's weighting the day before, the Korean stock market is included in the list of markets where foreigners can make a valuation call," adding, "In other words, the market has moved past concerns about the lower bound of the index and is now considering resistance points at the upper bound of the KOSPI."

She continued, "The approach to the U.S. employment data should be to set expectations as 'good results are bad for the stock market' and 'poor results are also bad for the stock market,' then watch the outcome," emphasizing, "We cannot overlook the performance of the U.S. stock market, the global leader, tonight."