[Good Morning Market] Korean Stocks Expected to Open Higher on U.S. Rally, Gains Likely Limited

"Compromise on Major Shareholder Transfer Tax Could Lead to Historic Highs"

Supported by a rebound in the U.S. stock market, the Korean stock market is expected to open higher on September 10. However, gains are likely to be limited due to profit-taking following the sharp rise in the KOSPI the previous day.

On the 5th, as the KOSPI index started the trading session on an upward trend, the KOSPI and exchange rate indexes are displayed on the index status board at the Hana Bank dealing room in Jung-gu, Seoul. 2025.09.05 Photo by Dongju Yoon

On September 9 (local time), the Dow Jones Industrial Average closed at 45,711.34, up 196.39 points (0.43%) from the previous session in the New York stock market. The S&P 500 index rose 17.46 points (0.27%) to 6,512.61, and the Nasdaq index jumped 80.79 points (0.37%) to 21,879.49. All three indices closed at all-time highs.

While concerns about an economic slowdown intensified due to a significant downward revision in the annual nonfarm payroll data, expectations for a rate cut in September also surged, pushing major indices higher. On this day, the U.S. Department of Labor announced that nonfarm payrolls had decreased by 911,000 compared to previous reports, based on a year-long employment and wage survey through the first quarter of this year. This figure is much larger than Wall Street’s forecast of a 680,000 decrease. There were also criticisms that the previous job growth had been overstated due to inflated employment data.

Amid these developments, investors are increasingly betting on the possibility of a rate cut by the U.S. Federal Reserve. According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds futures market reflected a 91.7% probability that the Federal Open Market Committee (FOMC) in September would lower the benchmark interest rate (currently 4.25-4.5% per annum) by 0.25 percentage points. The probability of a 0.5 percentage point cut was also estimated at 8.3%.

By sector, technology stocks led the gains. Despite Apple’s share price dropping more than 1% following the unveiling of the iPhone 17, Nvidia rebounded by 1.46%, and the telecommunications services sector also performed strongly. In contrast, the Russell 2000, which focuses on small-cap stocks, fell by 0.55%, showing a differentiated trend.

The strong performance of the U.S. stock market has created a favorable environment for the domestic market as well. Han Jiyeong and Lee Sunghoon, researchers at Kiwoom Securities, stated, "The domestic market is expected to open higher, tracking the strong performance of the U.S. stock market despite the downward revision in annual U.S. employment data."

However, with the release of the U.S. Producer Price Index (PPI) and Consumer Price Index (CPI) for August approaching, caution is increasing, which is likely to limit the market’s upward momentum. There is also an interpretation that expectations for maintaining the 5 billion won threshold for the major shareholder transfer tax have already been priced in.

They advised, "Although volatility may increase during this week’s CPI and PPI releases and next week’s FOMC and other macro events, it is appropriate to formulate strategies that avoid hasty selling." They also pointed out, "If a compromise on the tax reform plan is realized at President Lee Jaemyung’s press conference on September 11, there could be additional upside potential, and the market may even challenge historic highs."