Domestic Stock Market Rises Alongside US Market Boost... "Focus on Stocks with Improved Earnings"

[Image source=Yonhap News]

[Asia Economy Reporter Ji-hwan Park] The domestic stock market is showing an increase of around 1%, influenced by the rebound in the U.S. stock market overnight following less hawkish remarks by Jerome Powell, Chair of the U.S. Federal Reserve. In particular, the stock price recovery of growth stocks, which had recently experienced significant declines, is notable. Domestic market experts advise focusing on earnings-driven stocks as concerns over tightening could resurface at any time.

As of 10:01 a.m. on the 12th, the KOSPI stood at 2,956.37, up 0.99% (28.99 points) compared to the previous trading day. The index opened at 2,950.78, up 0.80% (23.40 points) from the previous day, maintained a strong trend, and at one point rose to 2,960.24.

By investor type, foreigners and institutions led the index with net purchases of 282.4 billion KRW and 156 billion KRW, respectively. Individuals were the sole net sellers with 431.8 billion KRW.

Among the top 10 stocks by market capitalization, all showed gains except Samsung Electronics (-0.25%) and Hyundai Motor (0%). SK Hynix (0.39%), NAVER (4.78%), Samsung Biologics (2.52%), and LG Chem (2.32%) rose.

At the same time, the KOSDAQ index was at 982.78, up 1.33% (12.86 points) from the previous day. The index started at 978.69, up 0.90% (8.77 points), and continued its upward trend.

By investor type, individuals and institutions were net buyers with 28.5 billion KRW and 9.6 billion KRW, respectively. Foreigners were net sellers with 31.5 billion KRW.

Most of the top 10 market cap stocks showed gains. Celltrion Healthcare (-0.49%) and Celltrion Pharm (-0.28%) declined. EcoPro BM (4.38%), Pearl Abyss (0.52%), L&F (5.80%), and Kakao Games (1.24%) rose.

Overnight, the U.S. New York stock market closed higher across the board. The Dow Jones Industrial Average closed at 36,252.22, up 183.35 points (0.51%) from the previous day. The S&P 500 rose 42.75 points (0.92%) to 4,713.04, and the Nasdaq closed at 15,153.45, up 210.62 points (1.41%). Chair Powell appeared at the Senate confirmation hearing for his reappointment and indicated that while interest rates could be raised if necessary to curb inflation, the pace of quantitative tightening could be adjusted. The market interpreted Powell’s remarks as less hawkish than expected, improving investor sentiment.

Han Ji-young, a researcher at Kiwoom Securities, said, "The December Federal Open Market Committee (FOMC) minutes and subsequent market expectations were less hawkish than anticipated. While the normalization of monetary policy?quantitative easing reduction → interest rate hikes → quantitative tightening?is expected to be implemented within the year, it is important to note that Chair Powell left room for adjusting the pace."

Domestic market experts advise paying attention to stocks with upwardly revised earnings forecasts. Lee Kyung-soo, a researcher at Hana Financial Investment, said, "Earnings upgrades in the semiconductor sector have contributed most to the KOSPI’s earnings upgrades, and sectors such as shipping, technology hardware (LG Innotek, Samsung Electro-Mechanics), construction, and shipbuilding also have improved earnings forecasts this year. Rather than broad index investing, it seems appropriate to focus on core stocks with earnings improvements."

Seo Jung-hoon, a researcher at Samsung Securities, emphasized, "The domestic market has relatively low price burdens compared to earnings, and expectations for improvement in core sectors remain. It is necessary to focus on stocks with clear value appeal, such as electrical/electronics, automobiles, materials, and finance."

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