[Good Morning Stock Market] The 'Tesla Effect' Led by US Record Highs... What Is the Impact on the Domestic Stock Market?

[Asia Economy Reporter Ji Yeon-jin] The three major U.S. stock markets have once again reached historic highs. The Tesla effect stimulated investor sentiment more than the caution ahead of the U.S. Federal Open Market Committee (FOMC) meeting. The Standard & Poor's (S&P) 500 index closed at 4,613.67, up 0.18% from the previous session, and the Dow Jones Industrial Average rose 0.26% to close at 35,913.84. However, the domestic stock market is expected to see a stock-specific market amid a wait-and-see stance due to central banks' monetary policies worldwide.

◆ Seo Sang-young, Researcher at Mirae Asset Securities = The U.S. stock market started higher supported by solid economic data ahead of the Federal Open Market Committee (FOMC) meeting but showed signs of turning lower as some profit-taking emerged in major tech stocks. Tesla (8.49%) surged sharply on news of launching a pilot program allowing other companies' vehicles to use 10 Supercharger stations in the Netherlands, pushing the Nasdaq to continue its record highs. Buying interest flowed into small-cap stocks, leading other indices to show a firm trend.

The MSCI Korea Index ETF rose 0.44%, and the MSCI Emerging Markets Index ETF increased by 0.79%. The 1-month NDF USD/KRW exchange rate stood at 1,178.72 won, suggesting a 2 won rise at the start of trading. The growing desire for profit-taking among large tech stocks that have recently led the U.S. market and ongoing changes after earnings announcements pose some pressure. Attention is also needed on central banks' moves ahead of the FOMC, including the Reserve Bank of Australia's (RBA) monetary policy meeting and the release of the Bank of Korea's Monetary Policy Committee minutes. Depending on the outcomes, volatility in interest rates and foreign exchange markets may increase. Considering this, the Korean stock market is expected to start with about a 0.3% rise, followed by a cautious stance and a continuation of a stock-specific market.

◆ Han Ji-young, Researcher at Kiwoom Securities = South Korea's October exports, announced on the 1st, increased by 24.0% year-on-year. Except for automobiles (-4.7%) and auto parts (-1.2%), the other 15 major items, including semiconductors (+28.8%), petrochemicals (+68.5%), home appliances (+13.9%), and secondary batteries (+1.4%), all showed strong performance, indicating that the impact of supply shortages on the domestic export industry is limited. Concerns about supply shortages may have peaked.

Considering these factors, the domestic stock market is expected to show an upward trend today, supported by continued risk asset preference despite caution ahead of the November FOMC. The strong performance of Tesla (8.5%) and Ford (5.1%) in the U.S. stock market, driven by expectations of expanded investment in the electric vehicle business, is likely to improve investor sentiment in domestic automobile and secondary battery-related sectors today. The small- and mid-cap stock rally in the U.S. market (Russell 2000 +2.7%) may also induce positive price changes in domestic small- and mid-cap sectors. However, it is necessary to keep in mind the possibility of increased price volatility as some new technology-related theme sectors that have seen rapid rises recently may experience short-term profit-taking.

◆ Choi Yoo-jun, Researcher at Shinhan Investment Corp. = The U.S. stock market is expected to respond positively to the record-high rally and strong Korean exports. Caution ahead of the FOMC has led to a rise in the USD/KRW exchange rate and a decrease in stock market trading volume. The consensus on the November FOMC is expected to mention specific tapering size and schedule (ending by mid-next year), with a more important focus on inflation assessment. If the results meet market expectations, it is anticipated to be an event that resolves uncertainty.

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