[Market ING] KOSPI Hovering Around 4,100, Awaits More Monetary Policy Events This Week

Weekly KOSPI Expected Range: 3,900?4,200

The KOSPI smoothly navigated last week's December Federal Open Market Committee (FOMC) meeting, but with a variety of monetary policy events scheduled for this week, investors should be mindful of increased volatility.

Yonhap News Agency

Last week, the KOSPI rose by 1.64% and the KOSDAQ by 1.36%. Lim Jeongeun, a researcher at KB Securities, analyzed, "Last week was characterized by a wait-and-see attitude as the market anticipated the FOMC results. Although there was a lack of clear direction, the upward trend was maintained."

Although the FOMC concluded without surprises, volatility is expected to increase this week due to the release of delayed U.S. economic indicators and upcoming monetary policy meetings of the European Central Bank (ECB) and the Bank of Japan (BOJ). Kim Jongmin, a researcher at Samsung Securities, stated, "The interest rate cut anticipated by the market was implemented at the December FOMC, and the market digested it with remarkable calm, indicating that investors are already looking ahead to next year. Now, the direction of future economic indicators and the policies of the next Federal Reserve Chair have become more important than the rate decision itself. Therefore, this week, when key economic indicators delayed by the government shutdown will be released all at once, will serve as a critical turning point in determining the market's direction going forward."

Some experts view the increased volatility from economic data releases as an opportunity to increase portfolio allocations. Lee Kyungmin, a researcher at Daishin Securities, said, "This week, the process of confirming economic indicators such as employment data, retail sales, and the Consumer Price Index (CPI), along with the outcomes of the ECB monetary policy meeting and the BOJ monetary policy meeting, will present opportunities to increase allocations during market fluctuations. The KOSPI's 12-month forward price-to-earnings ratio (PER) remains in the low 10s. If bond yields stabilize and decline, the market's valuation attractiveness will be reassessed."

Na Jeonghwan, a researcher at NH Investment & Securities, commented, "On the 16th, the November employment report and October retail sales will be released, and on the 18th, the November CPI is scheduled for release. While these are important data related to Fed policy, since they will be announced after the December FOMC, their market impact will be limited. The KOSPI is expected to fluctuate around the 4,000 level this week as investors monitor U.S. corporate earnings announcements." NH Investment & Securities forecast this week's KOSPI trading band to be between 3,900 and 4,200.

Key events this week include China's November retail sales, industrial production, and fixed asset investment on the 15th; the U.S. November employment report, October retail sales, and December S&P Global manufacturing and services Purchasing Managers' Index (PMI) on the 16th; the U.S. November CPI and the ECB monetary policy meeting on the 18th; and the BOJ monetary policy meeting on the 19th.

Additionally, Micron will release its earnings on the 17th, and Nike and FedEx will announce their results on the 18th. Kang Jinhyuk, a researcher at Shinhan Investment & Securities, said, "Following Broadcom's earnings last week, it will be important to assess the semiconductor industry outlook through Micron's results this week. In addition, as we enter the year-end shopping season, the earnings and stock performance of retail names such as Nike and FedEx also warrant attention."