Holiday Season Hits Korean Stock Market, "Uncertainty Expected Amid Overseas Market Fluctuations"

Ahead of Holiday, US and EU Monetary Policies and Various Economic Indicators to Be Announced
Global IT Companies' Earnings Releases Also an Influencing Factor

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Minwoo Lee] The domestic stock market, entering the holiday period, is expected to highlight uncertainties surrounding the earnings announcements of major U.S. tech giants such as Microsoft (MS) and Facebook, as well as the European Central Bank (ECB) monetary policy meeting.

According to Kiwoom Securities on the 30th, the domestic stock market is expected to show such trends. Kiwoom Securities researcher Sangyoung Seo stated, "The Korean stock market is likely to emphasize uncertainties related to the earnings announcements of major U.S. tech companies and the ECB monetary policy meeting during the holiday period, leading to a tendency to take a step back and observe the market rather than actively respond, or to release some sell orders."

He added, "Additionally, forecasts that manufacturing indicators from China and the U.S., as well as Korea's export-import statistics, to be released during the holiday, will be weak are also burdensome," and "Uncertainties regarding the trend of confirmed COVID-19 cases following the economic reopening in some U.S. states increase the likelihood of sell-offs."

Volatility in international oil prices is also expected to act as a burden. Researcher Seo explained, "There is an analysis that the oil storage capacity in the Cushing area of Oklahoma, U.S., will reach saturation early next month, making volatility expansion during the holiday period inevitable."

Furthermore, attention is expected to focus on the earnings announcements of global major tech companies in the U.S. Alphabet, Google's parent company, closed at $1,342, up 8.89% on the day after reporting better-than-expected earnings the previous day. However, the slowdown in revenue growth from 17% to 13% is a concern, presumably due to a decline in advertising revenue caused by COVID-19. Additionally, cloud revenue recorded $2.78 billion, falling short of the expected $2.81 billion, which is also a burden. Along with Alphabet, Microsoft (MS), a member of the 'trillion-dollar market cap club,' is scheduled to announce earnings on the 29th (local time), with Amazon and Apple set to report on the 30th.

Meanwhile, the New York stock market closed at a seven-week high on the same day. The Dow Jones Industrial Average rose 532.31 points (2.21%) to close at 24,633.86, the highest since April 10. The S&P 500 index also rebounded 76.12 points (2.66%) to 2,939.51, the highest since April 6. The emergency approval of remdesivir as a COVID-19 treatment and the Federal Open Market Committee (FOMC) decision to maintain zero interest rates by the U.S. Federal Reserve (Fed) appear to have acted as positive factors.

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