[Good Morning Stock Market] KOSPI Surpasses 2760 During Trading, Will Foreign Buying Continue?

[Asia Economy Reporter Oh Ju-yeon] On the 10th, the KOSPI rose to 2765.46 during the session, once again setting a new all-time high. While the buying strength of foreigners has weakened compared to November, individual investors are once again leading the market. Since December, foreigners have net sold 550 billion KRW worth, while individuals have purchased 1.7 trillion KRW worth. Despite the U.S. stock market showing weakness overnight, with the Nasdaq index falling more than 1% intraday, a rebound buying wave emerged due to a sharp rise in international oil prices and the European Central Bank (ECB)'s announcement of additional stimulus measures, reducing the decline or turning to gains. The Dow Jones Industrial Average and the S&P 500 fell by 0.23% and 0.13% respectively compared to the previous trading day, while the Nasdaq index closed up 0.54%. Attention is focused on whether foreign buying momentum will continue in the domestic market.

◆ Seo Sang-young, Kiwoom Securities Researcher = International oil prices have tended to react sensitively to positive news since the start of COVID-19 vaccination. Recently, despite a decrease in gasoline consumption and a sharp increase in crude oil inventories, the impact was limited, while ongoing terrorism issues at Iraqi oil fields caused prices to surge more than 3% intraday. Supported by this, energy sectors such as ExxonMobil (+2.83%) and ConocoPhillips (+3.04%) showed strength, and commodity currencies like the Australian dollar and Canadian dollar strengthened against the dollar.

Meanwhile, in the foreign exchange market, the pound weakened against the dollar, presumably due to heightened uncertainty over Brexit negotiations between the EU and the UK. The EU proposed emergency measures in preparation for a no-deal Brexit and extended the negotiation deadline until the 13th. However, the euro strengthened against the dollar, leading to a decline in the dollar index. This is attributed to the ECB's announcement at its monetary policy meeting to expand the Pandemic Emergency Purchase Programme (PEPP) by 500 billion euros to a total of 1.85 trillion euros. As a result, expectations for Eurozone economic recovery increased, acting as a factor weakening the dollar. However, considering that this was a foreseen development, changes in the stock market were limited.

The MSCI Korea Index ETF rose 1.01%, and the Korean stock market is expected to start with gains of 0.5% to 1.0%. The exchange rate is expected to start down by 1 KRW, and the rise in international oil prices is anticipated to have a positive effect on foreign demand. However, considering the slowdown in U.S. employment indicators and ongoing uncertainties related to additional stimulus measures, the Korean stock market is expected to start higher but shift into a stock-specific market influenced by individual stock issues rather than active broad-based responses.

◆ Lee Jae-sun, Hana Financial Investment Researcher = Next week, the domestic stock market is likely to continue a consolidation phase. There remains a lack of policy momentum to narrow the gap between the real economy and financial markets. While vaccine distribution expectations have been priced in, the passage of U.S. fiscal stimulus policies is expected to influence the market until the end of the year.

This week, the White House proposed a new stimulus package worth 916 billion USD, including direct payments of 600 USD per person. However, the direct payment amount is about half of what the Democrats previously proposed, and the federal unemployment benefit of 300 USD per week was excluded, showing ongoing differences with the Democrats. The next U.S. federal government budget execution deadline is the 18th, when the one-week temporary budget expires. The market is expected to react sensitively to related news flow until then.

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