[Market ING] KOSPI Expected to Fluctuate Around 3,200 Amid Cautious Investor Sentiment

The stock market continues to show sluggish movement. For the time being, fluctuations are expected to continue around the 3,200-point level, driven by various issues.

Yonhap News Agency

Last week, the KOSPI rose by 0.49%, while the KOSDAQ increased by 0.74%. Kang Jin-hyuk, a researcher at Shinhan Investment Corp., explained, "Last week, two major uncertainties were resolved, leading to a relief rally. First, with the expiration of the US-China tariff suspension approaching, President Donald Trump signed an executive order to extend the suspension for another 90 days. Second, the US July Consumer Price Index (CPI), which had raised concerns about the impact of tariffs, matched market expectations and fueled hopes for a rate cut in September."

It is expected that investors will maintain a cautious stance for the time being, and the KOSPI is likely to continue its range-bound movement. Kim Jongmin, a researcher at Samsung Securities, said, "Since August, the Korean stock market has shown mixed trends. After a significant rise since the beginning of the year, the market now appears to be taking a breather. With no clear direction, both upward and downward factors are intertwined, forming a box range for the index. Investors are still closely monitoring the ripple effects of tariffs and US macroeconomic indicators, maintaining a wait-and-see attitude."

The KOSPI is expected to continue fluctuating around the 3,200-point level. Lee Kyungmin, a researcher at Daishin Securities, commented, "It is inevitable that, along with the process of valuation normalization, there will be a tug-of-war between expectations for monetary policy and economic indicators until rate cuts resume." He added, "Depending on changes in the rate consensus (the average forecast of securities firms), the index will continue to fluctuate around the 3,200-point level in response to various issues." He also stated, "As the market digests supply, rotational trading and price alignment between leading stocks from the first half of the year and undervalued stocks will continue."

The main event this week is the Jackson Hole Economic Policy Symposium, which will be held from August 21 to 23. On August 22, a speech by Jerome Powell, Chair of the US Federal Reserve, is scheduled. In addition, on August 20, the minutes of the July Federal Open Market Committee (FOMC) meeting will be released, and on August 21, the S&P August manufacturing and services indices will be announced.

Researcher Lee stated, "The market's attention will be focused on the Jackson Hole meeting from August 21 to 23 and Chair Powell's speech." He continued, "The issue is the market's expectations, which have already been priced in. Currently, the market expects Powell to announce the resumption of rate cuts in September, as he did last year. If Powell merely maintains a neutral stance, it will fall short of current expectations, making it more likely that caution or a wait-and-see approach will prevail ahead of the event, rather than additional optimism."