[Good Morning Market] KOSPI Expected to Rise Led by Semiconductor Stocks

On September 17, the KOSPI is expected to start higher, buoyed by semiconductor stocks.

On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 45,757.90, down 125.55 points (0.27%) from the previous session. The S&P 500 Index finished at 6,606.76, down 8.52 points (0.13%), while the Nasdaq Composite Index ended at 22,333.96, down 14.79 points (0.07%).

The New York stock market closed slightly lower, as investors took profits amid short-term upward pressure, despite strong August retail sales and gains in major tech stocks such as Tesla and Amazon, with a wait-and-see sentiment ahead of the September Federal Open Market Committee (FOMC) meeting.

U.S. retail sales and import price data for August exceeded expectations, indicating robust consumer spending and inflationary pressure. Retail sales rose 0.6% month-on-month, surpassing the market forecast of 0.2%, while import prices increased by 0.3%, defying the consensus of -0.1%. These factors are seen as potentially weakening the case for a rate cut.

However, since the Jackson Hole meeting, the Federal Reserve has been placing more weight on the risk of a slowdown in the labor market, so the possibility of a rate cut in September remains valid. The market is expected to gauge, through the dot plot and economic outlook to be released at the September FOMC, whether the number of rate cuts this year will remain at two or increase to three. In this process, short-term stock price volatility may increase.

Today, the KOSPI is expected to open higher, led by semiconductor stocks on the back of strong U.S. tech stocks. However, with caution prevailing ahead of the FOMC, profit-taking is likely to occur, and the market is expected to end in a wait-and-see mode.

Notably, the KOSPI had risen for 11 consecutive trading days up to the previous day, continuing its record-breaking rally. Since 2000, there have been only four cases of the KOSPI rising for 11 or more consecutive trading days: 12 days during the Chinese economic boom in 2006, 11 days after large-scale stimulus measures following the 2009 financial crisis, and 13 days each in 2019 amid optimism about U.S.-China trade negotiations. This rally is also historically significant.

Han Jiyoung, a researcher at Kiwoom Securities, stated, "While some are raising concerns about overheating, the fact that the growth rate of margin loans has not kept pace with stock price gains suggests that speculative overheating signals are not significant." He added, "Since September, the growth rates of margin loans for KOSPI and KOSDAQ have been just 0.5% and 3.2%, respectively, while stock prices have risen by 8.3% and 6.9% over the same period. Individuals have been net sellers of 1.8 trillion won, whereas foreigners have been net buyers of the same amount, driving the index higher, which distinguishes this rally from previous overheated markets."

He continued, "Although there may be short-term pressure from current levels and increased volatility due to conflicting opinions after the September FOMC, foreign inflows, government policies to normalize the stock market, and the earnings momentum of leading sectors such as semiconductors, shipbuilding, and defense are being maintained. Therefore, even if a correction occurs, it should be viewed as an opportunity to accumulate shares through phased buying."