[Good Morning Market] Wait-and-See Sentiment Spreads Amid Lack of Events... Focus on Small and Mid-Cap Stock Flows

On December 5, the domestic stock market is expected to see sector and theme-based rotational trading, with downside pressure remaining limited.

Previously, on December 4 (local time), the New York stock market closed mixed as a wait-and-see sentiment spread ahead of the Federal Open Market Committee (FOMC) meeting scheduled for next week. The Dow Jones Industrial Average, which is centered on blue-chip stocks, closed at 47,850.94, down 31.96 points (0.07%) from the previous session. The S&P 500 Index, focused on large-cap stocks, rose 7.40 points (0.11%) to 6,857.12, while the tech-heavy Nasdaq Index gained 51.04 points (0.22%) to close at 23,505.14.

AFP Yonhap News

Lee Sunghoon, a researcher at Kiwoom Securities, stated, "Recently, both the Korean and U.S. stock markets have been attempting to recover, but the absence of major events that could drive overall market direction has led to a general decrease in market momentum." He added, "Leading stocks such as those in artificial intelligence (AI) and semiconductors have not managed to break through their short-term trend lines, and trading value and volume have also declined recently, which is in line with this trend."

Today, the domestic stock market is also expected to show a lack of clear direction, with a strong wait-and-see mood prevailing. One researcher noted, "Robot stocks, which showed notable gains in both the KOSPI and KOSDAQ markets yesterday due to positive news from the U.S., may see some profit-taking today." He added, "However, domestic nuclear power-related stocks could continue to benefit from the strength seen in U.S. nuclear power stocks, following supportive comments about nuclear expansion made by Jensen Huang, CEO of Nvidia."

Recently, the domestic stock market has seen rotational trading across various sectors such as semiconductors, finance, bio, and robotics. It remains to be seen whether capital will flow into small and mid-cap stocks, which have been largely excluded from the recent rally. Over the past month, the KOSPI large-cap index fell by 2.9%, while the KOSPI mid-cap and small-cap indices rose by 1.0% and 3.1%, respectively. Yesterday, the KOSDAQ market capitalization surpassed 500 trillion won for the first time ever during trading hours.

Researcher Lee commented, "Recently, small and mid-cap stocks have been outperforming large caps," and added, "Given the possibility of a short-term catch-up rally among previously neglected small and mid-cap stocks, it is advisable to continue paying attention to those with individual momentum through the end of the year."

Market attention is now turning to several stock market events scheduled for next week. On December 10, the U.S. October Job Openings and Labor Turnover Survey (JOLTS) will be released. The following day is both the expiration date for domestic futures and options and the last FOMC meeting of the year. On December 12, Broadcom's earnings will be announced.

The iM Securities Research Center stated, "Despite Nvidia's recent rebound, other semiconductor companies have been underperforming, showing signs of divergence and making volatility inevitable." The center recommended, "Next week, pay close attention to the earnings of Oracle and Broadcom, which are key companies in the AI cycle."