Domestic Stock Market Starts Higher Boosted by Improved US Investment Sentiment Amid 'Kyunggye Simni'

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] Following the upward momentum from the revived investor sentiment in the U.S. New York stock market overnight, the domestic stock market started higher on the 21st.

According to the Korea Exchange, the KOSPI index opened at 3,171.91, up 9.63 points (0.3%) from the previous day. The KOSPI is trading above the 3,180 level in early trading. The KOSDAQ index opened at 972.3, up 1.17 points (0.12%).

By sector on the KOSPI, the electrical and electronics sector (+0.66%), chemical sector (+0.36%), and machinery sector (+0.28%) showed strength, while the steel and metal sector (0.00%) was flat.

By sector on the KOSDAQ, the information technology sector (+0.41%), machinery and equipment sector (+0.30%), and other services sector (+0.26%) showed strength, while other manufacturing (-0.17%), computer services (-0.12%), and publishing and media reproduction (-0.02%) sectors were down.

Individual investors appear to be realizing profits in the KOSPI market, showing a net selling dominance of 54.3 billion KRW, while in the KOSDAQ market, they are net buyers with purchases worth 27.1 billion KRW. Foreign investors are net sellers in both markets, with net sales of 17.4 billion KRW and 17.5 billion KRW respectively. Institutions are net buyers of 72.6 billion KRW in the KOSPI market and net sellers of 5.9 billion KRW in the KOSDAQ market.

Meanwhile, major U.S. New York stock indices overnight reversed to gains after four trading days, supported by improvements in weekly unemployment data.

On the 20th (local time) at the New York Stock Exchange, the Dow Jones Industrial Average closed at 34,084.15, up 188.11 points (0.55%) from the previous session. The Standard & Poor's (S&P) 500 index rose 43.44 points (1.06%) to 4,159.12, and the tech-heavy Nasdaq index closed at 13,535.74, up 236.00 points (1.77%).

The market focused on improvements in economic indicators such as the weekly unemployment data. Until now, concerns that the Federal Reserve's (Fed) accommodative stance might be adjusted due to inflationary pressures had led to corrections in tech stocks. Subsequently, concerns about risk assets shifted to cryptocurrencies like Bitcoin. The Fed's April Federal Open Market Committee (FOMC) meeting minutes released the previous day suggested that policy adjustments could occur if the economy recovers rapidly, highlighting liquidity withdrawal concerns. The minutes indicated that if the economy recovers quickly, it would be appropriate to begin discussions on adjusting the pace of asset purchases at upcoming meetings. Although many members still believe that the threshold has not yet been reached, the market expects a rapid economic recovery over the summer due to improvements in employment and inflation indicators.

New York market experts forecast continued volatility in the market for the time being. Shima Shah, Chief Strategist at Principal Global Advisors, told the Wall Street Journal that the market is very sensitive to inflation rates and the Fed, and volatility will persist until more economic data clarifies the situation.

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