[Good Morning Stock Market] "KOSPI, Expecting Sector-Differentiated Market... Focus on Secondary Battery and Growth Stocks"

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] On the 19th, market experts forecast that the domestic stock market will generally show strength, but it is expected to be a stock-specific market with fluctuations depending on changes in individual stocks. In particular, stocks in the bio-healthcare, internet platform, secondary battery, and growth sectors are analyzed to show a differentiated market with relative strength.

◆ Donggil Noh, Researcher at NH Investment & Securities = In a situation where the KOSPI's rise is slowing down, a strategy focusing on changes in sector returns rather than betting on the index itself is effective. In the first half of the year, KOSPI sector returns outperformed the benchmark in the order of healthcare, software, IT home appliances, and chemicals. This was the result of active rebalancing toward future growth stocks during the first half correction phase. The promising industries anticipated by the stock market share common characteristics: bio-healthcare, internet platforms, secondary batteries, and growth stocks. In a situation where growth will become scarce after COVID-19, a premium is placed on growth stocks. The concentration on growth stocks, which showed favorable returns compared to the beginning of the year, may continue until there is confidence in economic improvement. The sectors of interest are software and electrification-related stocks centered on secondary batteries.

◆ Sangyoung Seo, Researcher at Kiwoom Securities = The U.S. stock market showed a stock-specific market where fluctuations were determined by factors of individual stocks amid little change in overall factors. In particular, some tech stocks continued their strength, and untact-related stocks showed strength, but even within those, differentiation occurred, showing a tendency for stocks to be concentrated. This could also affect the Korean stock market, so overall, the market is expected to be a stock-specific market with fluctuations depending on changes in individual stocks.

Trump made remarks that once again highlighted the U.S.-China friction. He emphasized again that China is the cause of the COVID-19 spread, which, considering the positive U.S.-China Hawaii talks the previous day, is expected to burden the stock market. Furthermore, the weak U.S. employment data is also expected to weigh on investor sentiment. However, international oil prices rose 2.3% amid expectations of maintained production cuts, and the U.S. stock market showed favorable movements in the late session, which is somewhat positive. Considering these changing factors, the Korean stock market is expected to show strength, but the range will be limited, and a stock-specific market is expected to unfold.

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