[Good Morning Stock Market] "This Year’s Domestic Stock Market... Export Cycle Recovery Is Key"

On the 6th, the KOSPI index closed at 1,917.50, down 29.48 points (1.51%) from the previous trading day. The KOSDAQ index closed at 551.50, down 18.29 points (3.21%). The won-dollar exchange rate ended steady. On that day, the KEB Hana Bank dealing room in Euljiro, Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporter Ji-hwan Park] The biggest expectation for the domestic stock market in the new year of 2020 is likely to be the possibility of a recovery in the export cycle.

Market experts anticipate that export indicators of companies will improve, with semiconductors?which account for a significant portion of exports in the first half of this year?showing signs of recovery. Additionally, the optimistic sentiment following the US-China trade negotiation agreement is also analyzed to have a significant impact on the domestic stock market.

◆ So-eun An, IBK Investment & Securities = The key focus in the first quarter of this year is whether exports, which are crucial to the Korean economy and stock market, will recover. Based on the base effect, easing of US-China tensions, and semiconductor market recovery, exports may increase this year. The government aims for a positive turnaround in export growth rate in the first quarter. Since the end of last year, the decline in export prices of major items including semiconductors has stabilized, reflecting the base effect, but the extent is not as strong or fast as initially expected. For export growth in the first quarter, not only price increases but also volume expansion need to be supported.

Export volume depends on external demand, and the manufacturing PMI import indices of China and the US began to rebound at the end of last year. This is positive as it indicates the possibility of improvement in external import demand. The US-China trade agreement, expectations for China's stimulus measures, and manufacturing inventory adjustments likely influenced this.

◆ Sang-young Seo, Kiwoom Securities Researcher = It is important to note that global stock markets, including the US, still show sectoral and stock-specific differentiation, with stocks burdened by earnings underperforming.

However, positive factors for large IT stocks driving the Korean index in the US market can be seen as factors leading to index gains despite sectoral differentiation. Expectations for proactive economic stimulus policies such as China's reserve requirement ratio cuts are also favorable. Although the impact was limited the previous day, this was analyzed to be a supply-demand factor due to foreign investors' futures selling. China's government stimulus policies increase the possibility of export growth to China in the future.

This content was produced with the assistance of AI translation services.