If Entering a Pause in Interest Rate Hikes?... Invest in 00 Industries

[Asia Economy Reporter Park Jihwan] Recently, the domestic stock market has shown increased volatility due to the shock of the rapid rise in U.S. Treasury yields. This is because growth stocks, which had been driving the domestic market's upward trend, perceived the rising interest rates as a negative factor and showed weakness.

So, conversely, if the upward trend in U.S. Treasury yields shows signs of subsiding, how should stock investment strategies be approached? Experts advise that it is time to pay attention to portfolios focused on growth stocks, which have experienced significant declines.

According to the financial investment industry on the 14th, on the 11th (local time), U.S. Treasury yields briefly fell below 1.5% during the trading session. The stable Treasury auction results for the 30-year bonds following the 10-year bonds last week are evaluated to have contributed to the stabilization of yields. Additionally, the European Central Bank (ECB) taking measures against the rapid rise in Treasury yields also influenced the yield stabilization.

Experts suggest that while interest rates are resting, there will be a rebound in the stock market, and special attention should be given to growth stocks that have experienced significant declines.

Lee Euntak, a researcher at KB Securities, predicted, "From mid-March, interest rate increases will pause temporarily, leading to a market rebound and a retracement of the decline in growth stocks." He added, "After that, interest rates will rise again, and over the next 2 to 3 months, a sector rotation of 'reflation-related stocks - growth stocks - reflation-related stocks' is expected."

Lee emphasized, "However, since it is realistically difficult to completely overturn a portfolio in a short period, aside from reflation-related stocks, the 'semiconductor + chemical (eco-friendly + secondary battery)' sectors are likely to outperform the market. Recently, for consumer discretionary stocks that have surged sharply, additional purchases can be considered during price corrections."

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