[Good Morning Market] US Rollercoaster... KOSPI Also Expected to Experience Volatile Trading Session

On the 9th, the KOSPI is expected to experience a volatile session influenced by the New York stock market.

In the previous day’s New York market, the Dow Jones Industrial Average closed at 37,645.59, down 320.01 points (-0.84%) from the previous session. The S&P 500 index fell 79.48 points (-1.57%) to 4,982.77, and the tech-heavy Nasdaq index dropped 335.35 points (-2.15%) to 15,267.91.

The New York market initially rose on expectations that the U.S. would negotiate tariffs with major countries. The Nasdaq surged more than 4% due to bargain buying. However, the market reversed and closed lower after U.S. President Donald Trump announced additional tariffs on China, raising the total tariff rate to 104%.

In particular, China is expected to continue releasing countermeasures against U.S. tariffs, increasing concerns over an escalation in the trade dispute. The market is aware that China is preparing various retaliation options, including deliberate depreciation of the yuan, selling off dollar-denominated assets, and imposing tariffs on U.S. agricultural products.

Amid the market’s anxiety over the escalating U.S.-China trade dispute, the upcoming Consumer Price Index (CPI) event tomorrow also poses a burden. Given the high tariff uncertainty, the CPI results could reignite stagflation concerns.

However, some analysts note that the announcement of retaliatory tariffs by both the U.S. and China still leaves room for negotiation through dialogue. Voices within the Trump administration calling for moderation in tariff levels are increasing, suggesting the possibility of future improvements.

The domestic market yesterday showed early gains of over 1%, supported by a narrowing decline in the New York market and Samsung Electronics’ first-quarter earnings surprise. However, it closed weaker after foreign investors sold off amid a sharp rise in the won-dollar exchange rate and ongoing tariff uncertainties.

Today, the domestic market is expected to see heightened intraday volatility, similar to the rollercoaster session in New York. Additionally, the offshore won-dollar exchange rate breaking above the 1,480 won level may negatively impact foreign investors’ supply and demand, who have net sold 7 trillion won since April.

Han Ji-young, a researcher at Kiwoom Securities, said, "Considering that the domestic market has a lower valuation burden compared to the U.S. market and that the KOSPI’s value in dollar terms has become more attractive, there is a persistent possibility of foreign investors being incentivized to buy at lower prices. Although overshadowed by the news of China’s tariff imposition, the fact that Trump positively evaluated his phone call with Prime Minister Han Duck-soo, acting president, discussing key issues including shipbuilding, the Alaska pipeline, and defense costs, will also help limit the deterioration of investment sentiment in the domestic market."