KOSPI Cruises Above 3200 Points... "Overall Market Momentum Up"

Stabilization of US Treasury Yields Eases Early Tightening Concerns
1Q Earnings Outlook Revised Upward, Maintaining Stable Trend

[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] The KOSPI has settled in the 3200 range, steadily tracing an upward curve. As long-term U.S. Treasury yields gradually stabilize, reducing market concerns about early tightening, and interest in corporate first-quarter earnings rises, a stable trend is emerging, analysts say.

At 10:37 a.m. on the 19th, the KOSPI recorded 3205.19. Around 9:55 a.m., it had risen to 3214.34. It started at 3201.11, up 0.08% (2.49 points) from the previous day, and gradually increased.

Despite foreigners, who had shown net buying for four consecutive trading days, turning to net selling (65.9 billion KRW), the index is rising moderately. While institutions have been net sellers for three trading days and individuals net buyers, the expectation was that foreigners' shift to selling would lead to a decline in the index, but it continues to maintain an upward trend.

The KOSDAQ has also been steadily rising recently. Since surpassing 1000 at the close on the 12th, it has settled in the 1020 range. Individuals were net buyers of 67.1 billion KRW, while foreigners and institutions were net sellers of 27.2 billion KRW and 27.3 billion KRW, respectively.

As the U.S. 10-year Treasury yield stabilized below 1.6%, the market's upward momentum is expanding from some leading stocks to the broader market. In fact, the U.S. S&P 500 rose 11.4% year-to-date, while the equally weighted S&P 500 index, which allocates equal weight to all constituent stocks, rose 15.4% year-to-date. This indicates that the upward momentum was stronger across the broader market rather than being concentrated in a few leading stocks. Similarly, in the domestic market, the KOSPI 200 index rose 11.1% year-to-date, while the KOSPI 200 equal-weighted index rose 14.9%.

Choi Jaewon, a researcher at Kiwoom Securities, said, "Compared to overseas markets, the domestic market showed higher volatility since the beginning of the year, limiting differentiation between the two indices. However, since mid-last month, as upward momentum expanded across the market, the rise in the KOSPI 200 equal-weighted index has become more pronounced. After the domestic and international markets adjusted due to the rapid interest rate hike at the start of the year, the markets have stabilized, and both the Korean and U.S. markets are showing increased upward momentum across the broader market," he explained.

The heightened expectations ahead of the first-quarter earnings announcements also had an impact. The operating profit forecast for KOSPI 200 companies this year has been continuously revised upward, reaching 189.6 trillion KRW. Along with the solid upward revision of earnings forecasts, the stock market showed a favorable trend, with the KOSPI's 12-month forward price-to-earnings ratio (PER) closing last week at 13.17 times, higher than the previous week. This exceeds the five-year average of 10.32 times.

Researcher Choi predicted, "As the first-quarter earnings season approaches and earnings forecasts for domestic and international companies are being revised upward, the increasing upward momentum across the market will temporarily ease valuation pressures on domestic and international stock markets, allowing for a continued favorable trend."

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