Market Ignores Powell's Moves... "No Excessive Expectations for China's Lianghui Economic Stimulus"

[Asia Economy Reporter Lee Seon-ae] The domestic stock market is expected to continue its volatility phase this week (2nd to 5th). Although there is growing anticipation ahead of the opening of China's Two Sessions (Lianghui: the National People's Congress and the Chinese People's Political Consultative Conference), investment advice cautions against excessive expectations.

According to the Korea Exchange on the 1st, on the last trading day of February, the 26th, the KOSPI index closed at 3,012.95, down 86.74 points (-2.80%) from the previous trading day. The KOSDAQ index closed at 913.94, down 22.27 points (-2.38%). This is interpreted as a result of the sharp drop in the US market following the surge in the US 10-year Treasury yield. Federal Reserve Chairman Jerome Powell dismissed inflation concerns, but so far, the effect has not been felt.

SK Securities forecasted that since interest rates have dampened investor sentiment, attention should be paid to the direction of US interest rates for the time being, and an expansion of volatility is inevitable.

This week's stock market issue is the Chinese Two Sessions. Investment expectations are high as it is anticipated that a 25 trillion yuan economic stimulus package will be passed, and this year, interest is inevitably focused more on re-flation.

Han Dae-hoon, a researcher at SK Securities, advised, "Since there is no clear guideline on how many years it will be implemented over, excessive expectations should be avoided," adding, "If the Two Sessions actually pass an economic stimulus package worth 25 trillion yuan and specific guidelines are announced, the strength of commodities, cyclical sectors, and re-flation will continue, but if the opposite occurs, disappointment selling may emerge."

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