[Good Morning Market] Options Expiration Day and COVID-19 Resurgence... Impact on Domestic Stock Market?

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[Asia Economy Reporter Park Jihwan] On the 12th, the KOSPI is expected to experience increased index volatility due to a supply-demand gap coinciding with options expiration day. The daily COVID-19 confirmed cases are anticipated to exceed the 2,000 mark for the second consecutive day, following the previous day, which may further dampen investor sentiment.

However, experts are leaning more towards a KOSPI rise, influenced by the rebound in the domestic semiconductor sector that sharply fell the day before and the still valid global economic normalization expectations despite the COVID-19 spread.

◆ Seo Sangyoung, Researcher at Mirae Asset Securities = The Korean stock market struggled yesterday as concerns over a slowdown in the semiconductor industry surfaced, causing related stocks to widen their losses. Particularly, as related sectors in Asian markets also deepened their declines due to these issues, overall investor sentiment weakened. Additionally, supply-demand factors such as large-scale net selling by foreigners also had an impact.

Although semiconductor-related stocks underperformed in the U.S. market overnight, the domestic related stocks experienced a larger drop. While COVID-19 issues dampened investor sentiment, expectations for economic normalization remain valid. Despite the U.S. government's mention of increasing crude oil supply, crude oil inventories have decreased and demand is expected to rise, leading to a turnaround and price increase. Considering these factors, the Korean stock market is expected to start with an approximately 0.3% rise. Of course, given that it is options expiration day, changes based on foreign futures trends may continue, so related supply-demand should still be closely monitored.

◆ Han Jiyoung, Researcher at Kiwoom Securities = The Korean stock market is expected to rebound due to relief over U.S. inflation indicators and renewed expectations for economic normalization in developed countries. As confirmed by U.S. consumer prices, the recovery in real demand is progressing robustly. Attention should also be paid to the valid expectations for U.S. infrastructure investment anticipated to be executed by year-end.

The sharp decline in the stock prices of top large-cap stocks such as Samsung Electronics and SK Hynix yesterday was somewhat excessive, so semiconductor stocks are expected to show a rebound today. Considering that the pharmaceutical and bio sectors, which have recently emerged as short-term leaders, may see investor sentiment weaken due to negative news from Moderna, the overall index rebound momentum is expected to be limited. Also, since it is options expiration day, it is deemed appropriate to be cautious of increased intraday volatility in supply-demand from foreigners and institutions in cash and futures markets.

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