Growing Volatility, Deepening Concerns... Which Stocks to Watch This Week?

[Asia Economy Reporter Junho Hwang] "Should I sell this week?"

Individual investors are facing deep concerns. These worries arose as the KOSPI fluctuated significantly last week (22nd-26th), rising over 3% before falling more than 2%. The rise in market interest rates has sparked anxiety that it might eventually lead to policy rate hikes. However, the securities industry largely believes that such concerns can be set aside for the time being.

Last week's market was turbulent. The Federal Reserve Chair, the equivalent of the U.S. central bank, tried to stabilize the market by emphasizing employment over interest rate hikes. The market seemed to stabilize following his remarks, but the U.S. 10-year Treasury yield surged to a record high, preventing investors from shaking off fears of policy rate increases.

Researcher Kyungmin Lee of Daishin Securities stated, "It will take time to regain confidence in economic recovery, but it is not expected to take long." The GDP growth rates for Q2 this year reached 10.8% in the U.S., 13.1% in the Eurozone, 8.57% in the G10, and 12.01% in Asia. This means growth drivers are entering the market that outweigh inflation and interest rate increases. Earnings forecasts for KOSPI companies are also being revised upward.

Lee added, "The more the KOSPI shakes and volatility increases, the more it is time to strengthen buying intensity," and forecasted, "We maintain a preference for increasing weight through KOSPI volatility strategies and structural growth stocks (internet, secondary batteries, renewable energy) and export stocks (semiconductors, automobiles, transportation)."

Researcher Myungjun Kwon of Samsung Securities said, "Portfolio rebalancing is necessary during this correction phase," explaining, "Because the premium for growth stocks may weaken somewhat due to rising interest rates."

He continued, "We recommend increasing exposure to contact over untact, IT hardware over IT software, and cyclical stocks over defensive stocks," and explained, "In this regard, this week's Samsung weekly recommended stocks newly include POSCO and Lotte Chemical, representative cyclical stocks."

Researcher Euntaek Lee of KB Securities also highlighted, "In sectors, we focus on re-flation and earnings improvement stocks, suggesting insurance, chemicals, and semiconductors as sectors to increase exposure," and recommended, "As niche sectors, we suggest buying consumer discretionary stocks (media leisure, apparel, education) that perform strongly in the mid-phase of the economic cycle."

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