[Good Morning Market] Shutdown Optimism... KOSPI Expected to Open Higher

On November 11, the domestic stock market is expected to open higher, despite the fact that expectations for a temporary end to the U.S. federal government shutdown had already been factored in the previous day. During the session, some profit-taking is anticipated, particularly in sectors that saw sharp gains the previous day.

On November 10 (local time), all three major indices on the New York Stock Exchange rose simultaneously, driven by optimism that the U.S. federal government shutdown would soon come to an end.

View of the New York Stock Exchange.

At the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 47,368.63, up 381.53 points (0.81%) from the previous session. The S&P 500 Index rose by 103.63 points (1.54%) to 6,832.43, while the Nasdaq Composite Index surged 522.64 points (2.27%) to close at 23,527.17.

Investor appetite for risk assets revived on expectations that the longest-ever shutdown would soon be resolved.

Among major sectors, technology and communication services soared more than 2%. Consumer discretionary and materials sectors also gained over 1%. Notably, the Philadelphia Semiconductor Index, which is heavily weighted toward artificial intelligence (AI) and semiconductor-related stocks, jumped 3%.

Among individual stocks, leading company Nvidia surged 5.79%, once again approaching a market capitalization of $5 trillion. Broadcom, TSMC, and ASML also rose by around 3%. Alphabet Class A shares climbed about 4%. Broadcom, Amazon, Microsoft, and Meta each rose by about 2%.

Palantir, which had been a major target for selling amid concerns of an AI bubble, rebounded strongly with an 8.81% gain.

This is expected to have an impact on the domestic stock market as well. Supported by the strength of the Philadelphia Semiconductor Index, led by companies like Micron amid rising expectations for higher memory prices, related stocks in Korea are also likely to perform well.

In particular, the KOSPI, which had experienced a sharp decline in prices among leading stocks such as semiconductors, is expected to use this momentum to alleviate some of the pressure.

Han Ji-young, a researcher at Kiwoom Securities, stated, "It is difficult to say that the burden from the sharp rally in October has been completely resolved, but the likelihood of a repeat of last week's nearly 6% intraday plunge should be viewed as low. It is also worth noting that although foreign investors recorded net selling on the KOSPI the previous day, the scale of their selling has been shrinking over time."

The researcher added, "It is also notable that the MSCI Korea Exchange-Traded Fund (ETF), calculated in U.S. dollars, has only now returned to its previous high, rising from $96.2 at its 2021 peak to $95.6 currently. This suggests that, for foreign investors investing in dollars, the Korean stock market is not in an expensive territory, making it appropriate to view a resumption of their net buying as only a matter of time."