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

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

With the KOSPI having navigated last week's December Federal Open Market Committee (FOMC) meeting without incident, market participants should be mindful of increased volatility this week as various monetary policy events are lined up.

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 marked by a wait-and-see attitude as the market anticipated the FOMC outcome," adding, "Despite the lack of clear direction, the upward trend was maintained."

Although the FOMC concluded smoothly, volatility is expected to increase this week as the release of delayed U.S. economic indicators, along with monetary policy meetings of the European Central Bank (ECB) and the Bank of Japan (BOJ), are scheduled. Kim Jongmin, a researcher at Samsung Securities, commented, "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, rather than the rate decision itself, the direction of future economic indicators and the policy stance of the next Federal Reserve Chair have become more important. Therefore, this week, when key economic indicators delayed by the shutdown will be released all at once, will serve as a watershed moment that will determine the tone of the market going forward."

Some analysts view the increased volatility from the release of economic indicators as an opportunity to increase portfolio allocations. Lee Kyungmin, a researcher at Daishin Securities, said, "This week, fluctuations during the confirmation of economic indicators such as employment data, retail sales, the Consumer Price Index (CPI), as well as the results of the ECB monetary policy meeting and the BOJ policy board meeting, should be seen as opportunities to increase allocations. The KOSPI's 12-month forward price-to-earnings ratio (PER) is only in the low 10s. If bond yields stabilize downward, the market's valuation appeal will be reassessed."

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

This week's key events 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 the 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 policy board meeting on the 19th.

Additionally, Micron will announce its earnings on the 17th, and Nike and FedEx will release their results on the 18th. Kang Jinhyuk, a researcher at Shinhan Investment & Securities, said, "Following Broadcom's results last week, it is necessary to assess the semiconductor industry outlook through Micron's earnings this week. Furthermore, as the year-end shopping season coincides, attention should also be paid to the earnings and stock prices of retail stocks such as Nike and FedEx."