[Good Morning Market] Foreign Investors Return and 'Santa Rally' Expectations

On December 23, the domestic stock market is expected to open higher, buoyed by anticipation of a U.S.-driven 'Santa Rally.'

Previously, on December 22 (local time), the New York stock market closed sharply higher across the board as year-end 'Santa Rally' expectations spread throughout the market. The Dow Jones Industrial Average, focused on blue-chip stocks, rose 227.79 points (0.47%) to 48,362.68. The S&P 500 Index, centered on large-cap stocks, climbed 43.99 points (0.64%) to 6,878.49, while the Nasdaq Index, led by technology stocks, jumped 121.21 points (0.52%) to 23,428.83.

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Han Ji-young, a researcher at Kiwoom Securities, commented, "After digesting major events over the past two weeks, expectations are emerging that there will be no significant events this week that could trigger a sharp market decline," adding, "This is leading to optimism for a seasonal Santa Rally at the end of the year and the beginning of the next."

With 4.5 trading days remaining until the U.S. market closes for the year, there may be an overall decline in trading volume, but Han assessed that this is unlikely to have a negative impact on the market's direction.

Riding the recent positive momentum from U.S. artificial intelligence (AI) stocks, the domestic stock market is also expected to start higher today on Santa Rally expectations. However, during the trading session, profit-taking is anticipated in stocks that have surged recently, resulting in a differentiated market by sector and theme.

The iM Securities Research Center stated, "In the domestic market, we can expect strength led by large-cap semiconductor stocks as capital flows in," adding, "Although Samsung Electronics and SK Hynix both posted steep gains yesterday, which may prompt profit-taking, AI investment sentiment remains strong and the upcoming 'CES 2026' event early next year could help maintain momentum."

Another positive factor is that foreign investors, who had been net sellers on the KOSPI for five consecutive trading days last week, turned net buyers the previous day, purchasing approximately 1.1 trillion won. In particular, they attracted attention by buying over 400 billion won worth of SK Hynix, despite credit buying and institutional trading being restricted due to investment warnings.

Han further analyzed, "This suggests that both foreign and institutional investors are placing more emphasis on improvements in industry fundamentals than on trading regulations," adding, "While the desire for profit-taking may increase as the domestic market continues to rise, it is appropriate to maintain at least a neutral or higher weighting in leading stocks."