[Good Morning Market] Caution Over Profit-Taking in Large-Cap Stocks Amid Mixed U.S. Close

Semiconductor Stocks Expected to Maintain Leadership for Now
"Excessive Declines Seen as Buying Opportunity"
"Biotech Stocks Also Worth Watching Ahead of Major Global Investment Event"

As the three major indices on the New York Stock Exchange ended mixed, analysts in the Korean securities industry predict that, on January 8, the Korean stock market may see some early profit-taking in large-cap stocks, coinciding with Samsung Electronics' earnings announcement.

On January 7 (local time) at the New York Stock Exchange, the blue-chip-focused Dow Jones Industrial Average closed at 48,996.08, down 466 points (0.94%) from the previous session. The large-cap S&P 500 Index fell by 23.89 points (0.34%) to 6,920.93, while the tech-heavy Nasdaq Composite rose by 37.102 points (0.16%) to close at 23,584.275.

On the 7th (local time), traders are working at the New York Stock Exchange in the United States. Photo by Reuters Yonhap News

By stock, Alphabet rose 2.5%, reaching a market capitalization of $3.89 trillion and surpassing Apple for the first time in about seven years. Apple declined by 0.77% on the day, bringing its market capitalization down to $3.85 trillion. Financial and energy stocks, which have been strong this year, declined. JPMorgan fell 2.28%, and Bank of America (BoA) dropped 2.85%. Expectations for the rebuilding of Venezuela's oil infrastructure diminished, causing Chevron and ExxonMobil to fall by 0.88% and 2.11%, respectively. Defense industry stocks were also weak.

Investors' attention has shifted from last weekend's U.S. airstrike on Venezuela and other geopolitical factors to economic indicators that could influence the U.S. Federal Reserve's monetary policy path. Among the indicators released that day, the service sector showed strength, but the pace of employment recovery fell short of expectations, sending mixed signals. In two days, the U.S. Department of Labor's Bureau of Labor Statistics (BLS) will release the December employment report, which reflects both private and public sector jobs.

The Korean stock market is expected to see a "pause for breath" in early trading. Due to concerns about the short-term overheating of some large-cap stocks at the start of the year, there may be a wave of profit-taking. The KOSPI has reached the 4,550 level, supported by strong performance in large-cap stocks such as semiconductors and automobiles at the beginning of the year.

Lee Sunghoon, a researcher at Kiwoom Securities, said, "After Samsung Electronics' preliminary earnings announcement, there may be some short-term profit-taking, which could partially disperse the concentration of funds in large-cap semiconductor stocks," adding, "After the preliminary earnings announcements of Samsung Electronics and LG Energy Solution, the market will likely attempt to reduce intraday losses."

He also stated, "Considering the continued structural strength in the memory semiconductor industry and the potential for further upward earnings revisions, semiconductor stocks are likely to maintain their leadership in the medium term. If stock prices fall excessively today, it should be seen as a buying opportunity at lower prices."

Additionally, Lee noted, "In the short term, it is also worth considering the effect of funds rotating into biotech stocks. Biotech stocks were strong in the U.S. market the previous day, and the JP Morgan Healthcare Conference, the world's largest biotech investment event, will be held from January 12 to 15. Now is the time to pay attention to biotech stocks in the domestic market as well," he added.