[Good Morning Stock Market] Now Is the Time to Focus on Cyclical Stocks

On the 10th, KOSPI opened at 2171.44, up 3.54 points (0.16%) from the previous trading day, as dealers were working in the Hana Bank dealing room in Jung-gu, Seoul. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Ji-hwan Park] Recently, in the US stock market, the previously relatively sluggish cyclical stocks have shown a notable upward trend. In particular, energy, materials, and industrial stocks have demonstrated strong performance. Market experts predict that the domestic stock market, which has also been dominated by growth stocks similar to the US market, should focus on cyclical stocks for the time being. Additionally, there is analysis suggesting attention should be paid to beneficiary stocks related to the Korean New Deal policy, for which the government plans to invest 160 trillion won by 2025.

◆ Sangyoung Seo, Researcher at Kiwoom Securities = Individual companies in the US stock market are showing a tendency for increased volatility. It is important to note that this is expanding due to earnings results or valuation pressures. The US stock market, which had been rising due to massive liquidity, appears to be transitioning to a fundamental market because of the earnings season. In particular, large tech stocks that had led the rise fell sharply by 5-12% compared to the previous day's high. Although the decline narrowed due to rebound buying amid earnings expectations, this increased volatility is a burden as it weakens confidence in the stock market. A characteristic of the US market is that financial stocks that announced earnings and tech stocks with continuous sell-offs showed weakness, while energy, industrials, automobiles, and steel showed strength. Looking at the US stock market over two days, there is a tendency to sell stocks that have risen significantly and rebound cheaper stocks. This is also why attention should be paid to cyclical stocks in the Korean stock market.

◆ Kyungmin Lee, Researcher at Daishin Securities = When the Korean New Deal policy is fully implemented, the sectors expected to benefit the most are wireless communication centered on 5G, data industries such as AI, big data, and cloud, as well as secondary batteries and renewable energy. These sectors have already secured mid- to long-term growth drivers. It is expected that the Korean New Deal will provide additional growth momentum. Going forward, the KOSPI is expected to develop an upward trend led by IT (data industries, secondary batteries, renewable energy, etc.). If there is a fluctuation process reflecting policy expectations in advance, it is recommended to use it as an opportunity to expand IT weight and reorganize portfolios centered on IT.

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