[Good Morning Stock Market] "US Stock Market Ends Slightly Higher... Sector Rotation to Continue in Korean Stock Market"

As the U.S. stock market closed slightly higher, the Korean stock market is expected to continue its sector rotation trend on the 20th, supported by improved liquidity conditions.

On the 19th (local time) in the New York stock market, the Dow Jones Industrial Average, centered on blue-chip stocks, closed at 44,627.59, up 71.25 points (0.16%) from the previous trading day. The large-cap focused S&P 500 index closed at 6,144.15, up 14.57 points (0.24%). This marked the second consecutive day of record highs. The tech-heavy Nasdaq index closed at 20,056.25, up 14.99 points (0.07%).

A trader is working at the New York Stock Exchange in the United States. Photo by UPI Yonhap News

By individual stocks, Microsoft (MS) rose 1.25%. MS announced that it had developed its own quantum computing chip, 'Mayorina 1.' Electric truck manufacturer Nikola plunged 39.13% after filing for bankruptcy protection due to management difficulties. Intel surged 16.06% the previous day on news that it would be split and sold to TSMC and Broadcom, but fell 6.1% on the day, partially giving back gains.

Hwang Sanhae, a researcher at LS Securities, said, "The New York stock market started lower due to concerns over tariffs from U.S. President Donald Trump and cautiousness over Russia-Ukraine peace negotiations, but rebounded after the release of the Federal Open Market Committee (FOMC) minutes confirmed the possibility of halting quantitative tightening (QT)."

Seo Jeonghoon, a researcher at Samsung Securities, analyzed, "If quantitative tightening is halted, the Federal Reserve (Fed) may repurchase maturing bonds. In that case, it could help the supply and demand environment for government bonds."

Regarding the Korean stock market on the day, Lee Seonghun, a researcher at Kiwoom Securities, said, "There may be some profit-taking selling mainly in stocks that surged rapidly due to the short-term breakthrough of the 200-day moving average, but the sector rotation trend will continue supported by improved liquidity conditions."

He added, "Especially, after the Chinese government announced the complete lifting of the Hallyu content ban (Hanhanryeong) regulations in May, about eight years later, there will be a rotation of funds into Chinese-related beneficiary stocks such as entertainment, gaming, and cosmetics."

Kim Jiwon, a researcher at KB Securities, said, "The KOSPI quickly approached 2,700 points after breaking through 2,600 points, with foreign demand improving and sector rotation occurring," and "the People's Bank of China’s Loan Prime Rate (LPR) decision, South Korea's January Producer Price Index (PPI), and earnings announcements from Samsung Life Insurance and Hanwha Life Insurance are scheduled for release today."