[Good Morning Market] "Year-End KOSPI Eyes 4,200 Points Amid Focus on Exchange Rate"

"Weekly Forecast Range: 4,050?4,220 Points"
"Impacts Include AI Stock Prices, FOMC, Ex-Dividend Dates, and Exchange Rate Volatility"

This week, as the year comes to a close and the new year begins, the Korean stock market is expected to monitor exchange rate trends closely and attempt to enter the 4,200-point range.

On the 29th, Kiwoom Securities stated, "While increased volatility in the dollar-won exchange rate may be inevitable, it remains manageable when considering changes in foreign investor flows." The company set its weekly KOSPI forecast range at 4,050 to 4,220 points. Key factors to watch include: ▲ fluctuations in U.S. artificial intelligence (AI) stock prices ▲ the minutes from the December Federal Open Market Committee (FOMC) meeting ▲ changes in the dollar-won exchange rate ▲ domestic year-end ex-dividend dates ▲ Korea's December export figures ▲ and the lifting of the investment warning on SK Hynix.

On the 26th, the KOSPI index and others were displayed on the status board of the Shinhan Bank dealing room in Jung-gu, Seoul. Shinhan Bank

This week, major global stock markets are expected to see subdued trading, as the number of trading days is limited to just three or four due to year-end closures and New Year's holidays (three trading days in Korea, China, and Japan; four in the United States). The Korean stock market will remain open through December 30, close on December 31 and January 1, and reopen on January 2.

"Exchange Rate Trends More Important Than Ex-Dividend; Need to Assess Long-Term Effectiveness of Government Measures"

First, as today marks the ex-dividend date for listed companies with December year-end settlements, there is a possibility of significant profit-taking related to dividends. Investors needed to purchase shares by December 26 to be eligible for dividends from companies with December fiscal year-ends.

One analyst commented, "In the early part of the week, the semiconductor sector may experience temporary downward pressure on stock prices due to short-term profit-taking and ex-dividend effects." However, he also advised, "It is important to maintain an overweight position in leading sectors, including semiconductors, across the domestic stock market."

He added, "Rather than the temporary ex-dividend event, changes in the exchange rate will be the main focus of this week's market news." He continued, "Following the government's foreign exchange market stabilization measures announced on December 24 (such as capital gains tax relief for overseas retail investors), the dollar-won exchange rate dropped by nearly 40 won, from 1,480 won to the 1,440 won range. While these measures were effective in curbing a short-term surge in the exchange rate, there are still divided opinions in the market regarding their long-term effectiveness."

He also noted, "Despite extreme exchange rate volatility last week, foreign investors net bought KOSPI stocks for five consecutive trading days, regardless of exchange rate movements. This indicates that foreign investors are currently focusing on fundamental plays centered on semiconductors, rather than engaging in exchange rate speculation."

"AI and Biotech Stocks Should Pay Attention to December FOMC Minutes"

From a macroeconomic perspective, attention should be paid to the FOMC minutes to be released on December 31. One analyst explained, "The market will gauge the degree of division within the U.S. Federal Reserve and make fine adjustments to its outlook for market interest rates at the start of the year." He added, "For AI-themed stocks, which have yet to escape the 'high valuation' debate, and for biotech stocks, which tend to be sensitive to interest rate changes, the December FOMC minutes will be a noteworthy event."

Meanwhile, on December 26 (local time), the New York stock market closed slightly lower in a subdued year-end atmosphere. No major economic indicators were released to move the market. On the New York Stock Exchange (NYSE), the blue-chip Dow Jones Industrial Average fell by 20.19 points (0.04%) to 48,710.97, while the large-cap S&P 500 Index declined by 2.11 points (0.03%) to 6,929.94. The tech-focused Nasdaq Index dropped 20.21 points (0.09%) to close at 23,593.10.

Looking at major stocks, Nvidia rose more than 1%, while Tesla fell over 2%. Oracle, which has been under scrutiny for its massive debt financing, ended slightly higher. Amid ongoing concerns about an AI bubble, Oracle's stock return for the fourth quarter of this year stands at around -30%.