Next Week's Domestic Stock Market... Possibility of Russia-Ukraine Negotiations VS Fed Interest Rate Hike

Dealers are working in the Hana Bank dealing room in Jung-gu, Seoul, on the 10th, as the KOSPI opened at 2,660.86, up 38.46 points (1.47%) from the previous trading day. On the same day, the won-dollar exchange rate started trading at 1,225 won, down 12 won from the previous trading day. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Lee Seon-ae] Next week (14th~18th), the domestic stock market is expected to show volatility influenced by expectations for the new government's policies, the possibility of a ceasefire negotiation between Ukraine and Russia, the US Federal Reserve's (Fed) interest rate hike, and the risk of Russia's debt default.

On the 12th, NH Investment & Securities forecasted the KOSPI index range for next week to be between 2650 and 2800. Researcher Kim Young-hwan of NH Investment & Securities said, "It is difficult to utilize the presidential election results for index trading, but there are opportunity factors from the perspective of individual sectors and stocks," adding, "Attention should be paid to areas where the existing government and policy direction will change."

President-elect Yoon Seok-yeol is expected to pursue selective welfare policies, private sector-led real estate policies, and carbon reduction policies centered on nuclear power generation. Accordingly, domestic consumption stocks such as distribution, clothing, and tourism, as well as utility sectors like construction, building materials, and nuclear power, are expected to benefit in the short term from policy expectations.

The war between Ukraine and Russia is seen as likely entering its later stages, as neither country has the capacity to endure further. Ukrainian President Volodymyr Zelensky expressed willingness to discuss territorial issues with Russia. Meanwhile, concerns over Russia's debt default are growing due to Western countries' freezing of overseas assets.

Researcher Kim said, "If Russia's default materializes, the international financial market will tighten, increasing the risk in emerging markets and raising concerns about short-term volatility expansion," and analyzed, "The Fed's interest rate hike could also be a negative factor for the domestic stock market next week."

The Fed is expected to raise the benchmark interest rate by 0.25 percentage points at the board meeting on the 17th. Discussions on tapering asset purchases at this meeting are also analyzed to have a negative impact on the stock market.

Meanwhile, the sectors of interest in the domestic stock market next week include semiconductors, non-ferrous metals, transportation, distribution, medical, construction, and nuclear power.

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