[Good Morning Stock Market] "Concerns Over Global Economic Slowdown Due to Ukraine Crisis... KOSPI Expected to Start Lower"

[Asia Economy Reporter Hwang Yoon-joo] On the 7th (local time), the U.S. stock market plunged sharply amid growing concerns over inflation and economic slowdown following news that a ban on Russian crude oil imports was being considered. Concerns over prolonged inflation and economic slowdown weighed heavily on the market. On that day, the Dow Jones Industrial Average closed down 2.37%. The S&P 500 index, which started the session slightly lower, continued to widen its losses and ended down 2.95%. The Nasdaq index closed down 3.62%.

Han Ji-young, Kiwoom Securities Researcher: "KOSPI expected to face downward pressure... Monitoring variables such as exchange rates and international oil prices"

[Image source=Yonhap News]

As the Ukraine crisis is prolonging longer than expected, the U.S. has expressed the possibility of independently imposing a ban on Russian crude oil imports, which has stirred market anxiety over stagflation. Before the start of the third round of negotiations between Ukraine and Russia, a considerable amount of optimism was reflected in stock prices, but aside from civilian evacuation issues, the talks ended without any major agreement. However, considering the increasing war damages on both sides, it is expected that maintaining a stalemate will be difficult. It is anticipated that conditional compromises will be reached through successive follow-up negotiations, including the fourth round scheduled as early as today.

Today, the domestic stock market is expected to face downward pressure amid concerns over global economic contraction due to the prolonged Ukraine crisis. While increased volatility is inevitable, further declines below the index’s lower bound are expected to be limited, as much of the concerns have already been priced in by the sharp drop in the previous trading day. Situations may change rapidly during the day depending on Ukraine-related issues.

The main factors to monitor are ▲ the impact of the won/dollar exchange rate on foreign investor flows ▲ intraday changes in international oil and agricultural product prices ▲ whether energy-related sectors experience increased price volatility and debates over further price rises. Considering these, it is judged that it is more appropriate to respond with a wait-and-see approach rather than trading based on intraday news flow at this point.

Seo Sang-young, Head of Media Content at Mirae Asset Securities: "Concerns over rising corporate costs increase... Korean stock market expected to start down about 1.5%"

The sharp drop in the U.S. stock market was due to rising concerns over increased corporate costs caused by surging commodity futures prices. The Korean stock market is also expected to feel the burden. Furthermore, it is still too early to speak positively about the Russia-Ukraine negotiations. Considering Russia’s announcements, the Russia-Ukraine issue may prolong, which is also a concern.

The domestic stock market is expected to start down about 1.5% and then show changes depending on movements in the foreign exchange market. In particular, the ripple effects of the sharp rise in nickel prices are expected to influence the market direction through changes in commodity-related sectors such as the secondary battery industry.

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