[Good Morning Stock Market] "Domestic Stock Market Depends on COVID-19 Spread for the Time Being"

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[Asia Economy Reporter Park Jihwan] As the number of confirmed cases of the novel coronavirus infection (COVID-19) has surged recently, an analysis suggests that the domestic stock market situation will depend on the number of new COVID-19 cases for the time being.

In the securities industry, the possibility of a sharp correction like in March is low, but if social distancing measures are reinforced again, it is analyzed that investors' psychological burden will increase, inevitably causing damage to the stock market.

◆ Seo Sangyoung, Kiwoom Securities Researcher = The government indicated yesterday that "if we fail to stop COVID now, a level 3 distancing" could be implemented. In particular, the quarantine authorities mentioned that although level 2 distancing is currently in effect, it is insufficient, and they are reviewing risk assessments daily. If such measures are implemented, the impact on the economy will inevitably be significant, so psychological burden may increase.

Considering this, the number of new COVID-19 cases announced by the quarantine authorities at 10 o'clock today is highly likely to affect the index, so attention should be paid to it. Of course, even in the worst case, considering the recent moderate monetary policy indications by Lee Ju-yeol, Governor of the Bank of Korea, there is anticipation for the Financial Monetary Committee meeting on the 27th, so the burden is expected to be limited.

◆ Han Daehun, SK Securities Researcher = Concerns about the second wave of COVID-19 are increasing. Currently, the plan to raise social distancing from level 2 to level 3 is under review. In particular, a conservative approach is necessary for domestic demand stocks and economically sensitive sectors.

However, abundant liquidity, such as customer deposits exceeding 51.4 trillion won, is expected to support the bottom. As another difficult period has come, it is a time to observe the COVID-19 spread situation and respond conservatively.

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