[Good Morning Stock Market] Expectations Rise Ahead of US-China Trade Agreement Signing Ceremony

Steve Mnuchin, U.S. Secretary of the Treasury (Photo by AP Yonhap News)

[Asia Economy Reporter Kum Bo-ryeong] Despite high valuations, the U.S. stock market rose on the 13th (local time) as optimism grew ahead of the signing ceremony for the U.S.-China trade agreement. Additionally, reports that the U.S. Treasury Department would remove China from the currency manipulator list led to an expansion in gains. This is likely to have a positive impact on the foreign net buying trend.

◆ Sangyoung Seo, Kiwoom Securities Researcher = Since January, the Korean stock market has continued its strong performance due to positive supply and demand factors, including foreign investors' net purchases totaling 1.8 trillion KRW. However, by sector, the semiconductor sector (+7.21%), which saw concentrated foreign net buying, led the gains, along with strong performances in hotels and leisure services (+6.91%), cosmetics (+6.43%), and software (+4.41%). In contrast, sectors such as energy (-6.74%), insurance (-5.88%), automobiles (-5.19%), and banking (-4.2%) showed weakness, indicating extreme sectoral differentiation. Ultimately, the Korean stock market's strength can be attributed to active foreign net buying in the semiconductor sector.

Meanwhile, the increased likelihood of the U.S. Treasury removing China from the currency manipulator list is expected to positively influence the foreign net buying trend. In particular, following related reports, the offshore yuan exchange rate strengthened about 0.5% against the dollar, raising expectations for won appreciation against the dollar. This won appreciation trend is expected to positively impact the Korean stock market by increasing the possibility of foreign net buying.

◆ Yumi Kim, Kiwoom Securities Researcher = Treasury bond yields closed mixed ahead of events such as the Monetary Policy Committee meeting and the trade agreement signing ceremony. Short-term yields slightly retraced recent sharp rises, with short-term funding market instability limiting the strength. Since the beginning of the year, volatility has increased, and fluctuations were limited ahead of the events. U.S. Treasury yields closed higher as expectations for the U.S.-China trade agreement and reports that the U.S. would remove China from the currency manipulator list strengthened risk asset preference. Treasury Secretary Mnuchin stated that a comprehensive agreement would be reached, raising expectations that the signing ceremony will proceed smoothly.

Meanwhile, after the U.S. market closed, the U.S. Treasury announced the removal of China from the currency manipulator list, while maintaining South Korea as a monitoring country. However, ongoing anti-government protests in Iran and persistent political uncertainty limited the rise in yields.

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